Electronic-commerce software maker Brokat AG is throwing in the towel, after attempts to reduce the company's massive debt burden failed.
Brokat filed to begin insolvency proceedings Friday, the company said in a statement. The company was unable to negotiate a restructuring agreement with creditors, and "at present there is no realistic chance" of getting out from under its mountain of debt, Brokat said.
The company called an extraordinary meeting for shareholders earlier this month after determining that its debt levels were unsustainable. Once a shining star of Germany's new economy, Brokat was named one of Europe's 30 hottest technology companies for 2001 by Time Magazine, but saw its shares (BRJ.FNM) collapse from a high of some 200 euros (US$176) in early 2000, to Friday's close of 0.38 euros.
Brokat was forced to sell off many of its most innovative properties in the past few months, agreeing last week to sell its mobile business operations to mobile-payment and electronic-government applications specialist eOne Global LP of Napa, California. EOne, a subsidiary of Denver's First Data Corp., will pay 28.25 million euros, less than the 42 million euros originally announced.
Brokat is left with its European electronic-finance software business, which has been spun off into a separate operating company, Brokat eFinance Technologies GmbH & Co. KG. Brokat said it is still searching for an investor to keep that operation afloat. The goal is to maintain the approximately 150 remaining jobs, and continue to serve current customers, Brokat said.