Earthport agrees rescue package

Earthport agrees rescue package

UK Internet payment start-up earthport has resumed trading on AIM with a new management team in place, following a six-month refinancing operation.

Trading in the shares of earthport resumed on AIM on Friday, after a six-month suspension. The company says it has raised £1.0 million by way of conditional loan note subscription. A further £0.35m is expected to be raised from current shareholders during January. Investors include Tallulah Properties Limited, Barry Martin Parker and a new investor Java Services Limited.

In addition, the company has arranged a loan from Delphis Bank of £500,000, and a further amount of up to £0.75m of asset finance has been agreed in principle. A capital reorganisation has also been mooted which should raise an additional £4 million.

Earthport says it is seeking to raise a further £1.5m by conditional share subscription from potential licensees in Q1 2002.

In a statement released on the Regulatory News Service, the company says: "The group's ability to meet its future working capital requirements, and therefore to continue as a going concern, is dependent also on the group being able to generate significant revenues and free cash flow from sales of its new product to new customers."

The suspension of trading in earthport shares followed the company's late-April announcements of delays in the development of its third generation online payment platform and a shortfall in revenues for the year to 30 June 2001. Earthport's new industrial strength technology platform has been built in partnership with IBM, EMC and eircom. Consisting of two IBM mainframe S/390 Parallel Enterprise Servers and an initial three terabytes of EMC Symmetrix Enterprise Storage, earthport says the new platform is capable of handling 70,000 credits and debits per second and processing up to 150 million transactions per day.

Marketing of the platform will be undertaken by a new interim management team, including Richard Flood as chief operating officer, Gregory Ward as chief commercial officer and Bob Mennie as chief financial officer.

Flood joins earthport with a track record of 13 years of sales management and business development in the software industry, with stints at JBA, Quality Software Products, PeopleSoft, Convoy Corporation and New Era of Networks. Ward joined the group as a consultant in October 2001 and has performed business development roles at Trafalgar House and Reed Elsevier. Mennie has been with earthport since its incorporation in 1997.

Under the re-organisation, former chairman David John Denys Vanrenen becomes a non-executive director. Eric Alan Kidger Tucker resigned his position as an executive director in mid-December.

The new team will be led by CEO Robert Cunningham who was introduced to earthport in October 2001 by corporate finance house Gelande Corporation. A search is underway for a new non-executive chairman.

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