House of pain

9 February 2004

One answer is when it is raised by a subsidiary that you have an agreement to sell. There s nothing wrong with that, if the sale goes through. But, unfortunately for Finmatica’s investors, in its case it hasn t.

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Finmatica said it would no longer be selling Finmatica Real Estate, its 100% owned real estate unit, to Loop Spa, a company which it owns a 10% stake of.

The software group had signed a contract with Loop at the end of December that was meant to complete on January 25. The contract spelled out 18 conditions that had to be respected if the sale was going to be valid. About half of these were not met by January 25th, according to a person familiar with the situation, so the contract lapsed. Loop then required more advantageous conditions to extend the date of completion, and Finmatica refused.

Finmatica still wants to sell the real estate subsidiary, but following the pulled deal might consolidate it. That would add E103m to its assets and E85m to its net debt. The company booked E9m as capital gains from selling its buildings to the real estate company in 2002.

Finmatica pulled a E55m private placement in January.

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