Durlacher shares rise despite new losses

The internet investment firm is due to announce a big trading loss, but has appeased investors with news that it has restructured its convertible bond.

Durlacher Corp Plc, the quoted UK internet investment company, said it would soon announce a big trading loss in its annual report, but managed to avoid further damage to its share price despite the news.

Instead, the group’s share price gained around 10 per cent after Durlacher had announced new terms for its convertible bond.

Last November Durlacher said it wanted to raise £30m via an exchangeable, and launched a first tranche worth £15m. Today the group won shareholders’ approval for saying there would be no second tranche and adding investors would be able to exchange £5m of the first tranche into the company’s stock at 10 pence per share. £1.2m had already been exchanged prior to today’s announcement.

Durlacher said the remaining amount of outstanding bonds would be replaced by £8.75m worth of new bonds that would be convertible at 25 pence after nine months, well above its current share price.

Durlacher blamed the difficult conditions in the technology markets for a “substantial loss” for the year ended June 30, 2001. The group said in a statement it was responding to the market’s challenge by “concentrating resources on revenue generating activities”.

Geoffrey Chamberlain, Durlacher’s CEO, told Reuters he could not predict when the company would return to profitability. It lost £13.9m in 2000, after having generated a £2m profit in 1999.

Early this morning, the company’s share price stood at five pence, valuing it at £47m.