World Travel Holdings, the company that bought Bob Geldof's Deckchair.com business, is to go into the telecoms business after failing as a travel operator.
The company's shares, which are listed on the Alternative Investment Market, came off suspension yesterday as the group admitted that it must cease all travel operations. It added that it does not currently have the funds to continue trading in its current form.
World Travel reported a loss of £1.4m for 2002 - the shares were suspended in July pending publication of these results.
The loss was an improvement on the £12.6m loss in 2001.
The company said: "The effects of the war in Iraq and the Sars epidemic produced a climate within which the group traded at levels significantly below expectations.
"This led to constraints on the group's cash resources, which in turn caused the termination of relationships with a number of the group's distribution channels.
"As a result, the directors concluded that it would not be possible for the group to be profitable, as previously anticipated, in the current year and they decided in January, that in the absence of a further fund-raising, the group would have had to cease trading."
Since January, the company has been trying, unsuccessfully, to raise new equity financing to support "a new strategy" for the business within the travel sector.
"We have now been faced with the choice of allowing the company to fail or to change direction and try to rebuild the company in markets with a greater margin and, in our view, more potential," World Travel said.
The company revealed it had bought "a very small and loss-making technology" business, Wanbase, a "virtual network" telecoms operator, from Culver Holdings, its former parent, of which World Travel's chairman, John Biles, is also a director.
World Travel warned: "It will, however, be necessary to raise further capital to fund the commuted claims of creditors and provide working capital for the future.
"This must be completed by 31 October or the company will fail."
World Travel Holdings bought Deckhair.com, which was founded by Mr Geldof, in March 2001 but sold the business earlier this year.Reuse content