Shares in Payzone fall to record low

SHARES IN troubled Dublin-based electronic payments group Payzone fell to an all-time low yesterday after the company announced it has sold its businesses in France, Italy and Spain for €20 million.

Payzone's stock closed down 14.3 per cent in London yesterday at 6 pence. This gave it a market value of just £26.44 million.

Payzone was formed last December through the merger of Irish electronic payments group Alphyra with UK ATM operator Cardpoint.

Its shares opened on the Alternative Investment Market (AIM) at 76 pence but have since declined steadily.

The businesses are being sold to LCom, a French company that specialises in the distribution of payment products and services.

Under the deal, Payzone will receive €13.2 million in cash and €6.8 million "by way of assignment of financial guarantees".

In addition, Payzone will write off €4.2 million it is owned by the businesses. The deal is scheduled to close on October 31st, subject to regulatory approval in France.

Payzone said it would use the majority of the funds to pay down debt. "The remainder will be retained by the company," a statement from the group added.

Payzone said the total net liabilities within the three businesses were €3.6 million at August 31st and they contributed a €600,000 loss to the company's pretax profits for the nine months to the end of September.

Payzone's intention to sell these businesses was revealed by The Irish Timeson August 8th.

Commenting on the deal, Payzone chief executive Mike Maloney said: "This is great news for Payzone. France, Italy and Spain were not part of our strategic focus on growth.

"By completing their disposal the management can concentrate resources on Payzone's key business. This represents an important step forward in our strategy to focus on those markets that offer significant scale and growth for our services."

Payzone hit the headlines in January when it sought to dismiss chief executive John Nagle and finance head John Williamson.

The pair obtained a High Court injunction preventing their dismissal, but were sacked in March after an egm of shareholders.

Payzone then raised €40 million through an equity placing and drew down €291 million from Royal Bank of Scotland to refinance its debt.

In June, Payzone reported an operating loss of €152.9 million for the six months to the end of March 2008.