USIT in talks on €8.1m debt

Negotiations are under way between USIT and a multinational technology company about an €8.1 million debt that the multinational says it is owed.

A source said the USIT company is confident it can reduce the claim significantly. Any claim that is agreed will be paid out at only 3.5 cents to the euro - credit terms outlined in a scheme of arrangement for USIT World.Com drawn up by its examiner, Mr David Hughes.

Mr Hughes, of Ernst & Young, presented schemes of arrangement for USIT World.Com and USIT Ireland Ltd to the High Court on Wednesday. A decision on the matter is expected on Monday.

Three groups of investors sought to buy the companies. One was STA, the Swiss-based travel company. Another was an Irish travel company. A third, a consortium that involves Dublin finance house Ion Equity and two unnamed property investors, is set to buy the two companies for €2.2 million.

Equant Network Solutions had a contract for the provision of services to USIT World.com for a five-year period. The company is claiming that it is entitled to complete payment for the period, which it is understood has more than another two years to run. The full amount due to the company was listed in the scheme of arrangement as €8.1 million.

However it was pointed out that this was a contingent item. Mr Justice McCracken has asked that any saving that emerges from reducing the claim should be shared out among the company's other creditors.

The contract with Equant does not form part of €18 million that was invested by USIT in USIT World.Com to put in place a system that would give real-time access to the group's companies to USIT's point-of-sale outlets in Europe. This €18 million was invested a number of years ago in hardware, software and installation costs. USIT World.Com supplied technology services to the USIT group companies. Its assets are now said to be of little value.