at least geac isn't in this position...
Top Financial News
Thu, 17 Feb 2000, 9:52am EST
Baan Given Four Weeks to Raise Equity or Be Dropped From Amsterdam Trading
By Jane Baird and John Buckley
Baan Has 4 Weeks to Raise Equity or Drop From Index (Update1)
(Adds detail on listing, analyst comment in fourth and
seventh paragraphs, updates shares.)
Amsterdam, Feb. 17 (Bloomberg) -- Baan NV, a Dutch business-
management software maker, was given four weeks by the Amsterdam
stock exchange to raise enough equity so that the company's assets
exceed its liabilities. Baan shares fell as much as 16 percent.
Slipping into negative equity would lead the exchange to drop
Baan from Amsterdam's benchmark AEX index. Baan shares, which were
suspended at the opening for 35 minutes, fell as much as 1.16
euros to 5.82, their lowest price since Aug. 3, 1995.
Baan, which has suffered from slumping sales and accounting
irregularities, had $9 million in equity and $197 million in cash
on Dec. 31. Its equity has been depleted by six straight quarterly
losses. The exchange requires it to have positive equity, which
means that its net equity exceeds its net liabilities.
``Everyone's looking to see whether they will survive this
year,' said Raoul Sprangers, an analyst at F. van Lanschot
Bankiers. ``I think they have a problem attracting customers;
their reputation is not too good anymore.'
Baan said it will next report to the exchange in mid-March on
its plans to increase equity.
The company has agreed to sell its CODA accounting software
unit for $50 million in cash and expects to record a gain of about
$30 million from the sale when it closes by the end of March. It
also has hired Lazard Freres & Co. to help raise capital.
Takeover Candidate?
Sprangers said Baan could be a good takeover candidate for a
U.S. or other foreign company eager to acquire the Dutch concern's
extensive customer base in Europe. Co-founder and former chief
executive Jan Baan a month ago said as much, too.
Fletcher International Ltd., a private equity company, has
offered Baan $40 million, in addition to $210 million it provided
in exchange for Baan shares last year. Baan needs $50 million in
shareholders' equity to be eligible for that funding, however.
Last month, Mary Coleman resigned as chief executive and has
yet to be replaced. She was one of five senior managers that the
Dutch company has lost in three years.
Its shares have fallen 50 percent so far this year, making it
the worst performer on the benchmark Amsterdam Exchanges Index. |
