Knorr announces major cuts

Knorr Capital Partners is to cut its workforce by 75 per cent as it looks to ride out the current lack of exit opportunities.

German venture capital firm Knorr Capital Partners is to reduce its workforce from 80 to fewer than 20 as part of a cost-cutting exercise brought on by ongoing exit difficulties for its investments.

The firm will also terminate its listing on the SMAX market of the Deutsche Börse in a further attempt to reduce costs. KCP hopes that the cost-cutting measures will help it reduce its annual expenditure to around E2.5m by 2003.

As part of the restructuring program, Thomas Knorr will relinquish his position as chief executive officer and take up a position on the supervisory board, which will be reduced from six to three members. Manfred Frey, currently on the firm's management board, will replace Knorr. KCP will focus on the sites in Munich, Eschborn and Montréal, resulting in the closure of offices in offices in Switzerland, the Netherlands, Scotland, Israel, Hungary, Boston, California and Quebec.

A company statement confirmed that exit opportunities had become impossible for the firm at the moment. “If the market environment does not improve substantially in the second half of 2002, KCP anticipates reporting an overall loss for the current financial year.” The firm hopes that its restructuring program will provide ‘a sound basis for recovery in the share price in the coming year.’

At the time of its listing in 1999, Knorr issued shares at E12.5. KCP shares are currently trading at a low of E0.75. The firm has seen the value of its investment portfolio halve to E90m since it posted half-year results in July 2001, because of further write-downs on portfolio companies.