The whole sorry story10 May 2010 11:14
Timestrip is about to regenerate into its fourth incarnation since joining AIM in 1999. ....
Timestrip is an example of how some AIM comapnies have tried more than one business in order to try to move into profit. It floated as shell company Chandra in October 1999 at 25p a share – equivalent to 750p a share post-consolidation in 2004. The shares were suspended on 19 April 2010 at 0.3p each.
Chandra acquired online music distribution business Groovetech to form IMM in April 2000. A 72% stake in Groovetech cost £8.8m in shares and £2.41m was raised from a placing and open offer at 158p a share – equivalent to 7900p. In August 2001, IMM raised £1.85m at 12p a share – equivalent to 600p.
IMM went through a company voluntary arrangement at the end of 2004 because the internet music business did not succeed. There was a 50-for-one consolidation at the time.
IMM then bought smart label business Timestrip for £6.4m. The reversal and a £3m placing were completed in February 2005 at a price of 4p a share.
The development of the smart label business has taken much longer than expected and revenues remain too low for the company to stem its losses. Timestrip only had enough cash to keep it going until July and that is why the board decided to sell the business. Equity and structured debt finance could not be obtained.
Timestrip is selling its smart label technology business for £160,000 in cash plus deferred consideration of £65,000, dependent on the receipt of R&D tax credits, to a consortium of existing shareholders which includes three of the four directors. The purchaser will also take on £7.5m of intercompany loans.
Timestrip will change its name to Mungo Trading and its main asset will be the £160,000 in the bank. The disposal should be completed on 1 June if it is approved by shareholders.
All the directors will resign except for Jonathan Steinberg. Newly proposed director Mark Nelson-Smith is a former investment banker with UBS. He is a partner in Talisman Management, which provides turnaround/transformation management for private equity and distressed lenders. He is also a senior adviser to One Square Advisors an independent financial restructuring advisory firm based in London and Munich.
The new investing policy of the company will be to acquire companies in the “general engineering or industrial products sector within the United Kingdom or Europe”. It will acquire stakes in companies with proven management.
If shareholders do not agree on the new investing policy then they can vote to wind up the company and appoint Fisher Partners as liquidator. The company estimates that shareholders could receive a distribution of 0.03p a share if they vote for winding up.
All this means that less than 11 years the share price has fallen from 750p to 0.3p and there is a prospect of getting 0.03p a share back if the company is wound up.
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