German software company Brokat has appointed Robertson Stephens, the investment bank, to explore ways for the company to raise cash, according to a report from the FT.
The Financial Times says the bank is understood to be facing obstacles to its work because of the terms of a bond Brokat issued last year.
Any transaction resulting in a change of control at the company would force it to repay a Euro 125 million bond, according to an exchange offer filing to the SEC in August last year. Another provision prevents Brokat from selling assets or subsidiaries unless 85 per cent of the consideration is paid in cash, says the paper.
Brokat has asked Dresdner Kleinwort Wasserstein to start negotiations with its bondholders on the possible restructuring of the bond, which was issued in March 2000, says the FT.
Thomas Friedrich, analyst, Hypovereinsbank, says: "Given that Brokat will have third-quarter operating costs at about the same level as in the second, there is a high risk that it could go bankrupt within the current quarter if revenues are slightly below the preceding quarter."
The company released lower-than-expected preliminary results for the second quarter on Friday. Brokat said it would report a loss before interest, tax, and depreciation of Euro 40 million ($35 million) - almost double what analysts had expected - on sales of Euro 28 million, also below estimates, writes the paper.