The entire board of AIT is to resign at an extraordinary general meeting called to approve a refinancing agreement for the embattled UK CRM vendor.
Details of the rescue plan emerged as the company reported operating losses of £8.7m and a cash outflow of £7.3m in the year to 31 March 2002. This compares to a profit of £5.1 million in the previous year. The company says it has experienced "very difficult trading conditions" following its surprise announcements on 13 and 19 June 2002 that it was experiencing liquidity problems. By yesterday, the company's indebtedness had risen to £14.3 million.
The refinancing package, which is expected to raise approximately £20.5 million, has been led by AIT founder and recently appointed executive chairman Richard Hicks. The company has called an EGM to be held at AIT’s headquarters in Henley on 5 September 2002, where the package will be put to shareholders for approval. Failure to agree the deal and receive associated regulatory clearance will result in the company declaring insolvency.
Hicks says AIT will appoint a new board of directors, comprising company turnaround specialists and members of the core investors group to replace the current management team who will offer their resignations at the EGM. The proposed directors include new CEO Nicholas Randall, who helped turnaround Airtech and oversaw M&A activity with wireless group Remec; Geoffrey Probert - formerly responsible for information systems at Perpetual and a technical strategist at Amvescap - as software development director; and G. Felda Hardymon and Robert Stavis of Bessemer Venture Partners as non-executive directors. Matthew White, who has experience in corporate recovery, having managed distressed businesses as part of Arthur Andersen’s corporate financial services team, will be appointed as chief financial officer, but will not be a member of the board.
The initial phase of the turnaround plan calls for a reduction in overheads by the end of September 2002 to a level commensurate with minimum anticipated sales. Precise details of the cutbacks have yet to be released.