iSoft takeover hopes rise after rapid restructuring

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The Independent Online

A rapid restructuring of iSoft's business has given rise to hopes that the troubled healthcare software developer will attract a bidder and secure the future of the business.

Shares in the company surged nearly 15 per cent to 46.75p yesterday on better-than-expected first-half results which raised hopes that iSoft's new management team can negotiate a deal after a disastrous year for the company.

John Weston, the chairman and acting chief executive of iSoft, said that the company cut costs more rapidly than it had planned during the first half of the year after it slashed 16 per cent from its costs. He added that there was still much work to do, but that the company expected to return to revenue growth within the next two years.

Mr Weston said that the restructuring work it had done opened up a range of options for the future of the business. He said that "active talks with a number of parties" had been conducted since October, but that a sale of iSoft is only one option open to the company to plug the hole in its working capital requirements. Other options include a fundraising, he said.

He said that the situation has to be resolved by next November, when the company's interest payments become onerous. "The sooner this is solved the better," he said.

ISoft has not named the parties it is in discussions with, but General Electric has been considered a potential buyer of the business.

Mr Weston said that despite revealing problems related to its €56m contract in Ireland, he would be "absolutely astonished" if the issues resulted in a cancellation of its order.