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Friday, 27 July, 2001, 11:21 GMT 12:21 UK
Scoot says 'one month left'
Detail from Scoot UK website
Scoot: No rescue by part-owner Vivendi
Scoot.com, the UK-based online directory company, has said it will run out of cash in one month's time unless it obtains new funding.

The announcement came as the company said it was selling its 50% stake in Scoot Europe to partner Vivendi Universal, the French media and utilities giant, for a nominal one euro (62 pence).

Scoot Europe (six months ended 30 Jun)
Revenue 3.5m euros
Operating loss 33.4m euros
Net liabilities 92.5m euros (as of 31 Mar)
Late last month, Scoot shares lost more than two-thirds of their value after the company admitted its cash shortage had become critical.

By early afternoon on Friday, the stock had slipped again, reaching three quarters of one penny to be 99.8% down on last year's peak.

Expansion postponed

After a strategic review completed in June, the struggling company said it was cutting 285 jobs, postponing expansion plans to focus on UK operations and changing its way of charging customers.

Chief executive Robert Bonnier also resigned.

On the day the results of the review was announced, Scoot shares fell 68% to 2.25p.

In March last year, at the height of the tech boom, the shares had touched 351.5p.

Scoot's slumped shares had received a modest lift recently when part-owner Vivendi Universal said it was considering making an offer for the company.

But the shares resumed their downward spiral when Vivendi said any offer would not exceed 15p a share.

It later pulled out of talks.

One more market?

Scoot said its European unit would have been forced to file for bankruptcy, had the sale to Vivendi not taken place.

Under the terms of the sale deal, Scoot retains exclusive rights to operate its service in the UK and Ireland and retains the right to expand into one European market of its choice - excluding France, Belgium and the Netherlands - which it must nominate within six months.

Break even target

Scoot - which aims to earn commission by referring users to businesses - has repeatedly said it is sticking to targets for the UK business to break even by the end of this year.

But it said this was subject to obtaining additional working capital, possibly through issuing new shares or disposing of non-core assets.

If the cash situation deteriorated, measures including the sale of popular advertising magazine Loot would be considered.

On Friday, Scoot said it was in talks over a bridge financing facility of up to 15m ($21m) that might help tide it over.

It also reiterated that the sale of Loot was still under consideration and was the only measure that would, alone, eliminate the working capital shortfall.

Scoot bought Loot for 180m last July. One analyst said it could only hope to sell it for about half that now.

Free trials scrapped

For Scoot users, the strategy shift involves introduction of up-front payments of yearly publishing fees and scrapping of the free trial period for new sellers.

Scoot said its new strategy would reduce risks associated with the business model and was in the best interests of shareholders although "substantial commercial and implementation risks" remained.

On Friday, Scoot said the reduction in numbers of new sellers that the strategy had caused had been "higher than expected".

Chairman Dick Eykel will take an executive role until a new chief executive is appointed.

Scoot has said it is cutting UK jobs but has not said how many are to go.

The company employs 1,400 people in the UK and a further 500 in France, Belgium and the Netherlands.

See also:

27 Jun 01 | Business
Scoot shares plunge as chief quits
23 Jul 01 | Business
Vivendi profits surge 53%
06 Jun 01 | Business
Scoot dives as Vivendi ends talks
30 Apr 01 | Business
Vivendi discusses Scoot takeover
31 Aug 00 | Business
Scoot shrugs off losses
12 Jun 00 | Business
Scoot gets Loot
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