Cash crisis forces AIT to suspend its shares

AIT Group, the crisis-hit software company, said its cash problems were so severe that it had no choice but to suspend trading yesterday in its shares.

"The directors' ongoing analysis of the company's cash flow requirements and the resources available to it, have led them to conclude that the liquidity difficulties facing the company can no longer be regarded as short term and are likely to be resolved only upon completion of a sale on terms which allow the group to discharge its liabilities," AIT said.

A producer of customer relationship management software for the financial sector, AIT revealed its difficulties on 31 May, when it issued a shock profits warning and said its directors have had to loan the business £700,000 to keep it going.

AIT said then that a key contract had not yet been confirmed and that there would now be a £1.1m shortfall in profits and revenue. In addition, the company said it had become aware that its short-term cash requirements would not be covered by its borrowing facilities.

Last week, the company delayed publication of its annual results and issued its second profits warning. The directors, led by the chairman and chief executive, Carl Rigby, said they were "actively pursuing a sale of the company and have already received a number of expressions of interest". AIT also said it has found a £4.3m hole in its profits on top of the £1.1m disclosed in the previous alert, as more business had fallen away.

Yesterday, AIT shares were suspended at 32.5p, valuing the company at just £6.6m. The stock traded as high as 1,880p in 2000 and even over the past 12 months AIT shares have traded at 870p.

The company said that it had received several further expressions of interest since last week from potential purchasers. Along with advisers UBS Warburg, AIT is "vigorously" trying to sell the business, which is the only way out of its difficulties. Debt stands at some £11.3m.