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M2S Files for Bankruptcy

31 October 2001 13:13
By Tornado Staff

M2S, a Swedish e-learning company, has filed for bankruptcy after failing to reach a settlement with the company’s major creditors.

In a statement the company said: “M2S is insolvent following the bank’s foreclosure of its check credit facility and stopped payments of salaries to employees in Sweden”. In fact bank SEB closed its credit line last week on Wednesday.

During the past six months, M2S has carried out a restructuring plan reducing staff from 480 employees in ten countries, to about 300 in five countries. But today the company admitted that these measures will not provide sufficient means rapidly enough to allow it to survive.

Less than two weeks ago a 38 per cent stake of M2S was acquired for about €1 million by competitor AcadeMemdia. Bengt Stillström founder of Traction, the venture capital firm that backs AcadeMedia, has taken over as chairman of the Board at M2S.

After his appointment he presented a rescue plan to save M2S, which aimed to create the conditions for a new share issue, bringing in €15 million. At the same time, in order to reduce liabilities worth €10.4 million, an attempt was made to sell the German subsidiary, valued at €5 million. On the Stockholm Stock Exchange M2S shares were suspended from trade on Friday, at SEK 2.36. Time to fulfil the rescue plan ran out on Monday.

In the period from January to September 2001 M2S registered net losses of €56 million, and a cash position of €1.7 million.

This is the third bankruptcy this year that affects a company listed in Sweden. In September it was the turn of Alfaskop, an IT consultancy firm specialized in providing ASP management software that totalled 400 employees. In July Castcom, a provider of IP based solutions for call centers, was the first company of the New Market segment to declare bankruptcy.

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