Brokat fate to be decided

The survival of e-commerce software specialist Brokat AG is at stake as the company convenes an extraordinary shareholders' meeting Monday.

Creditors will be asked to approve a financial restructuring plan meant to save the company, which has already been forced to sell off some of its most innovative operations.

Since the last shareholders' meeting, Brokat's financial situation "has continued to deteriorate due to the economic downturn in demand and the cost structure," the management board wrote in an agenda for the Monday meeting.

If the company is unable to address its excessive debt load by the end of November, it faces insolvency, according to an audit by the accounting consortium Moores Rowland International.

Brokat has been in negotiations with investors for some months to try to ensure continued operations.

In August the company agreed to sell off parts of its business, including operations of the former U.S. software companies Blaze Software Inc., and GemStone Systems Inc., which Brokat bought last year for more than US$830 million. The Blaze operations went to HNC Software Inc. for $20 million, and the GemStone properties to Investors Group Holdings USA Inc. for $1.7 million.

Also sold off was Brokat's North American financial applications division, featuring software enabling banking transactions via mobile phones and PDAs (personal digital assistants), which Metavante Corp. snapped up for $18.5 million.

Shareholders will also be asked to approve the sale of Brokat's mobile business technologies unit to eONE Global LP, for 42 million euros (US$37.5 million).

The company said it will refocus on its core competency, European electronic finance, enabling financial services to customers on the Web, on wireless devices, via ATMs, through call centers, and in person in branch offices.

Brokat, in Stuttgart, Germany, can be reached at +49-711-788-44-0 or http://www.brokat.com/. HNC can be reached in San Diego, California, at +1-858-546-8877 or http://www.hncs.com/. Metavante, in Milwaukee, Wisconsin, is at +1-414-357-2290 or http://www.metavante.com/. EOne Global, in Napa, California, can be reached at +1-707-299-2300 or http://www.eoneglobal.com/.

» posted by abennett

IDG News Service

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