Struggling online directory firm Scoot.com has sold its main asset, the Loot classified advertising business, for £45 million sterling to newspaper publisher Daily Mail and General Trust.
Scoot, which was destined to run out of money this month unless it raised fresh funds, said today the publisher of the
Daily Mail
and the
Evening Standard
had also agreed to provide it with £10.5 million in bridging finance.
Scoot said the bridging loan would enable it to trade until at least the beginning of October, when it was hoped the deal would be finalised. Scoot shareholders will need to approve the sale at a meeting to be held no later than September 14th.
Founded in 1984, Loot is one of the leading free classified ad publishers. Its free-ads paper is published in 20 editions per week across Britain and has weekly circulation of about 180,000 copies. Its Website, Loot.com, generates about 24 million monthly page impressions and had 557,000 unique users, based on an independent audit in March.
The Loot business, which includes a 91.67 per cent stake in B&S Ltd, publisher of Buy & Sellin Ireland, made an operating loss of £2.8 million in the 17 months ended December 31st. At that date, it had net liabilities of £3.3 million.
Scoot shares traded at 2.25 pence after the announcement, up from yesterday's close of two pence. The company was worth around £1.9 billion during the height of the fever for technology, media and telecoms stocks early last year.
Scoot owes about £17 million pounds in debentures. Holders of the debentures can demand repayment once Loot is sold, but Scoot said they were unlikely to do so while it was still looking at selling its remaining business as a going concern.
Last month, Scoot agreed to sell its 50 per cent stake in its European venture to partner Vivendi Universal SA for a symbolic one euro in a deal that handed most of the venture's liabilities to the French media group.