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Not so Easy Everything gets £15m
Net cafe chain runs out of capuccino
EasyEverything, the Internet cafe chain, has received a lifeline injection of £15m cash from founder and Easyjet chairman Stelios Haji-Ionnou.
This is constructed as an issue of fresh capital in which Stelios' share in EasyEverything will rise to 99 per cent. "This company had run out of cash," he told the FT. It could not meet the payroll this month. Other people would have pulled the plug. I am going to take another roll of the dice."
The new shares have been struck at 1p, while the shares at the inception of the company were worth £1 each. Also on the balance sheet £10m loan from HP and VC house Apax Partners was convertible into shares worth £7 each. Clearly there won't be much in the way of conversion going on.This loan is now to be repaid in instalments from next year, the FT says.
Stelios may be throwing good money after bad, but by taking his stake up to 99 per cent and diluting everyone else's, he will ensure that he's front of the queue if EasyEverything goes titsup.com.
Stelios has checked his legal position re the share increase and the price, and everything is pukka, he tells the FT. But its shows how bad EasyEverything's position must be, that Stelios could have pushed this through without a single squeal (at any rate in public) from minority shareholders, or preference creditors.
Easyeverything is a 21-strong chain of very low-cost and very big Internet cafes situated in major cities in eight countries. At the time of the launch of Easyeverything's first branch, in London, Victoria, rival Internet cafe businesses questioned the ability of the company to make even an operating profit, at the bargain basement prices it charged.
Following Stelios' putsch (CEO Maurice Kelly and IT director John Sands have left the company), the group is retrenching to London, New York and Paris. Stores in Antwerp and Rotterdam are to be shut and Rome is under review. ®