Shares in Baltimore Technologies moved higher today as investors reacted positively to news the company plans to split itself in two and sell off non-core assets in a bid to avert bankruptcy, dealers said.
Baltimore rose by 3.25p to 25.5p in London this morning after the announcement.
Announcing broadly in-line second-quarter results, the software security firm said it would combine its authorisation and public-key-based products into one unit, while putting up for sale its content security business as a separate unit.
Baltimore also said it intends to cut a further 220 jobs, which, in tandem with its other restructuring moves, should enable it to reap euro 114 million in annual cost saving
But one analyst, speaking off the record, said the restructuring plan far from guaranteed Baltimore's survival past the early months of next year.
"Baltimore's cash position remains perilous, and reserves will likely only last until March 2002 - some nine months before it attains positive cash flow. This means that Baltimore is relying on a quick sale to its content businesses if it is to avert off bankruptcy," the analyst said.
"It is going to be quite tight for Baltimore - when you're selling assets in a distressed situation buyers aren't going to overpay," he said.
Baltimore also announced it would voluntarily delist from the Nasdaq and move to the OTC Bulletin Board with effect from Sept 30th, 2001, a move it said would save two million sterling per year.
AFP