The chief executive of Scoot, Robert Bonnier, yesterday fell on his sword as the troubled internet directory firm admitted it would go bust by September unless it received an emergency injection of cash.
Mr Bonnier's resignation, along with the departure of finance director Ronald Dorjee, was announced among radical changes, including a decision to introduce charges for callers using its widely advertised freephone directory number. It is also cutting 285 of its 2,000-strong workforce.
Scoot said it could need as much as £22m to continue trading. The company said it could achieve this by either selling its recently acquired Loot newspaper business, by borrowing money against Loot's cashflow or by attempting to place new shares with investors. Its biggest investor, French media group Vivendi, announced it was writing off the value of its 7% stake.
The troubled company's prognosis, revealed in a review called Project Genesis, was worse than analysts had expected. Scoot's shares halved to a new low of 3.5p, having collapsed from 160p since September.
Mr Bonnier, a 32-year-old Dutchman, was one of the main investors when Scoot was established six years ago and was often mentioned as one of the City's most promising young entrepreneurs. Jon Molyneux, the head of Scoot's UK operations, has been appointed chief operating officer to take day-to-day charge.
Mr Molyneux said: "Robert is a visionary. His strength and forte was in looking to the future as the company got bigger and bigger. We're a much smaller business now, and that's a very different environment for a guy like that to operate in."
Mr Bonnier and Mr Dorjee are likely to get a year's remuneration in compensation, amounting to about £320,000 each.
Scoot, which has operations in Ireland, France, Belgium and Holland, is to drop its plans for further international expansion and will consider selling its overseas assets. Mr Molyneux said: "We've felt a cash strain in expanding into Europe in such a dramatic fashion without the UK being in a cash positive position."
The firm's hopes for profitability at home have been hampered by problems in introducing a new technological platform, Scoot Version 2, which is supposed to allow directory users to search with much more detailed criteria.
Teething problems have prevented the firm from adding new businesses to its database, and some subscribers have quit the system through frustration. The number of paying business subscribers has fallen 15% to 16,635 since December.
Mr Molyneux's preferred option is to securitise the revenue stream from the firm's profitable Loot business, bought for £177m last summer. He said other avenues were being explored, including an outright sale of Loot, which is his "least preferred option". Takeover talks at 15p a share with Vivendi recently collapsed.
