Finnish investment company Menire has written down the entire book value of its portfolio company, Moving Skills and placed the company into liquidation. Menire holds a 23 per cent stake in the company and the write-down amounts to EURO0.65 million.
In spite of recent efforts, e-learning company Moving Skills was unsuccessful in securing the further funding it needed to continue operations. Last year, Menire sold its holding in Moving Skills to Bonnier Media. The transaction was part of a technical restructuring, whereby Moving Skills’ business activities were transferred to a new company with a healthy balance sheet and better profitability abilities.
Menire suffered a EURO1.77 million capital loss on the sale of the shares. Prior to the transaction, Menire held 14.1 per cent in Moving Skills, which it increased in the new company by converting outstanding loans into shares of 23 per cent in the company.
Menire Corporation invested SEK15 million as equity and SEK4 million as loans in Moving Skills. There were three investment rounds that took place in December 1999, June 2000 and August 2000. UK-based Emerging Technologies Ltd and Norwegian Kunskapf Norge also participated in the funding rounds.
Menire also recently agreed to sell its holding in Emcat IT consulting business, Emcat eBusiness Solutions. The buyer, Swedish Emaco Support will pay SEK1.00 for the shares. The deal is part of a technical restructuring to separate Emcat’s business operations into two separate companies. Menire will exchange its convertible loan with a nominal value of SEK10 million to a call option. The call option entitles Menire to increase its holding to a maximum of 20 per cent in Emcat by 31 December 2006. Menire’s current holding in Emcat is 17.65 per cent and Menire has written down the corresponding acquisition cost of EURO1.8 million.
Managing director of Menire, Peter Seligson said: “Menire has done constant work to restructure its portfolio during the latest 18 months. The restructuring and focusing of the portfolio has paved the way to exploit the possible market upturn.”
Menire has also recently announced its successful exit from portfolio company, Digital Illusions in less than a year since its original investment in the company. Menire invested SEK20 million with Nordic investment specialist, 2M Invest last spring. Menire will make a profit of around EURO502,241 on the sale corresponding to an annual gross IRR of 96.6 per cent.