Inside job saves LibertyOne
- 19 October, 2000 12:01
Asian Internet incubator iReality has come to the rescue of distressed Internet venture LibertyOne, offering a recapitalisation deal that could potentially amount to $34 million in funding.
The deal should enable LibertyOne to keep its Zivo Web development arm, receiving a $2.85 million investment from iReality today, of which $500,000 will be provided for interim working capital. Subject to shareholder and foreign investment review board approval, iReality will then buy another $3.63 million in shares to take its ownership in LibertyOne to 19.95 per cent.
This initial $6 million in funding is only the tip of the iReality iceberg, with options in place to provide another $28 million, inching closer to a possible controlling share in LibertyOne.
Backed by private US investors, iReality began operations in March with the aim of becoming a leader in Internet business consulting in the Asian region. One of its three founders, Matthew Burlage, is already on the board of LibertyOne and will now become co-chair of the LibertyOne board if the deal goes ahead. Burlage's two co-founding partners of iReality, Ravi Sarathy and Thomas Britt, will also take seats on the LibertyOne board.
According to a release on the ASX, the three iReality members on the LibertyOne board intend to review the business and implement whatever changes are necessary to turn the company around.
"This represents a $34 million vote of confidence in the company and its future," said LibertyOne CEO Marcelle Anderson.
"The agreement also allows LibertyOne to retain full ownership of our core Zivo business which, after recent rationalisation, has a substantially reduced cost structure and improved profit outlook," she said.