News blog
Minorplanet Systems
- BY: Andrew Hore |
- POSTED: 08/06/2010 |
Shares in telematics firm Minorplanet Systems have been suspended pending clarification of its financial position.
This comes soon after Minorplanet bought back its UK operations from the administrator of its UK subsidiary. Minorplanet owns 75% of MPS 2010, the company buying the UK business, with South African vehicle tracking technology developer DigiCore owning the rest. DigiCore provided the £3m loan to finance the purchase. The loan is secured on the shares of MPS 2010 owned by Minorplanet and is due for repayment on 14 November 2010.
If the loan is paid back DigiCore’s 25% stake in MPS 2010 will revert to Minorplanet but that looks increasingly unlikely given the poor financial state of Minorplanet. It looks more likely that it will end up losing the UK business in November if the finances are not sorted out.
The UK business generated two-fifths of Minorplanet’s revenues and lost £2.5m in the year to August 2009.
Minorplanet reported a drop in revenues from £5.5m to £3.5m in the six months to February 2010. The loss from continuing activities increased from £1.7m to £1.9m. Net debt was £2m at the end of February 2010.
Minorplanet is involved in litigation that could drain its coffers. There is a potential claim of €2.09m from Popular de Renting SA, which provided leasing finance to a subsidiary of Minorplanet. The claim relates to a 2002 agreement, where the leasing provider claims that the holding company guaranteed the obligations of the subsidiary.
There are separate claims relating to the former UK subsidiary.
At the suspension price of 6p a share, Minorplanet is valued at £400,000.
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