Bright Station Seeks Funds As Cash Runs Out

Bright Station is attempting to gain additional funds in order to secure its financial position. At the end of March it had £7.4 million available cash, but has continued to spend at the same rate as Q1 throughout April. The groups says that based on the discussions that have taken place with potential investors so far, it remains confident that additional finance will be made available.

In a statement the Bright Station said: “The Board has concluded that it is no longer feasible to continue its current rate of cash expenditure in support of all of its business initiatives notwithstanding their potential for value creation. Accordingly the Board has determined a radical restructuring of the Group to reposition it as a ‘pure play’ knowledge management business through its Smartlogik subsidiary.”

Smartlogik is an internet-based knowledge system that can be customised for individual companies. Bright Station had originally intended to float this business as an independent public company, but now says that due to capital market conditions, this will not be possible in the near term. Instead, it is to become the core of Bright Stations business.

As a result, the group is immediately rationalising its ecommerce businesses, which may include the disposal or closure of Sparza and Officeshopper and reduction in corporate overhead. Dan Wagner, chief executive of Bright Station, is in talks to acquire some of the company’s ecommerce assets and liabilities.

Today’s announcement offers the latest in a series of similar restructuring and refocusing moves by Dan Wagner’s company.

The group previously operated as Maid until it became Dialog in 1997, following the acquisition of rival information group, Knight Ridder. Dialog then struggled to make interest repayments resulting from the takeover and was forced to sell off its core business. The remaining web services business become Bright Station.

Today’s announcement sent shares down 5¾p to 15¼p.