Tomorrow is a new day for 131Shop
- 15 February, 2001 10:21
High-tech investment firm Tomorrow Group has taken a 45 per cent stake in the dot.com disaster 131Shop.com.au with the intention of gutting it and setting up a new business.
One of the many Internet companies who enjoyed the high life when it listed in July 1999, 131Shop has lived a tortured existence for the last 12 months, missing its 2000 revenue forecast and posting an $8.95 million loss. It has not yet been announced what the new business will be.
131Shop will issue Tomorrow with 14 million options to subscribe to fully paid shares at an exercise price of $0.10 each over seven years. Tomorrow will also pay between $70-80,000 up front for a block of 31 million shares, however no money will change hands until the 131Shop options have traded at $0.10 or more over five consecutive trading days.
The agreement contains a three-year anti-dilution clause enabling Tomorrow to maintain a 40 per cent control of 131Shop throughout the issue of further options as well as three seats on the board. The deal still has to be approved by 131Shop shareholders at an annual general meeting in April, however Tomorrow CEO Wayne Bos says he expects the transaction to be accepted.
131Shop directors Trevor Gardiner, Andrew Haythrope and Chris Hayward have resigned from the board to be replaced by Bos, Tomorrow managing director Rod Lyle and COO Alan Studley.
"The key thing is to know that you're entering a very competitive market for which you've got to have a product that offers value for money," said Trevor Gardiner, executive director of 131shop.com.au when listing on the ASX two years ago. Apparently, the Web services company failed to take its own advise.