Sharechat Logo

Jade pulls share float as cashflow dries up

By Chris Hutching

Friday 8th August 2003

Text too small?
Jade Software Corporation has canned its public float because a sharp deterioration in its balance sheet this year means that ordinary sharemarket investors and analysts would shun a share offering.

A forewarning of the dramatic turnaround at Jade became apparent a few weeks ago when senior marketing executive Peter Helms resigned ahead of new chief executive Rod Carr taking over the reins.

Mr Carr was formerly deputy governor of the Reserve Bank and has been brought in to shake up the organisation.

Mr Carr said that over the next few days and weeks he would be consulting staff about what positions should be made redundant, with the aim of making cost savings of about 25%.

Corporate sponsorships are also under review as the company focuses on the core business of promoting the Jade software and cutting back on research and development in other areas.

"We need a reasonable prospect that we can be cashflow neutral before we go to investors for recapitalisation."

A slump in international sales of technology products is being blamed for the fall in fortunes but the company has struggled to make headway for some time and last month announced that it would provide free access to its Jade software although it would charge for commercialisation.

The experts agree that the technology is sound but it has yet to be accepted on a wide scale.

The recapitalisation of Jade is yet to be finalised with potential private investors. Mr Carr said the company would seek $10-25 million ­ a wide range but it would depend on terms and conditions.

Company founder Sir Gil Simpson has about 90% of the shares after a recapitalisation two years ago involving venture funder I-Cap Partners. Mr Carr said some of the same investors would be involved.

Jade employs 383 people with most of them in Christchurch.

Last June Jade named UBS as lead manager for its float and Stock Exchange listing this year.

The company value was estimated at between $100 million to $150 million.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report