Tradepoint back from brink after pounds 11.4m injection

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The Independent Online
Tradepoint, the electronic trading exchange established to rival to the London Stock Exchange, was yesterday rescued from the brink of administration by venture capitalists and brokers who have injected pounds 11.4m into the company.

The refinancing of the Aim-listed company follows a pounds 775,000 emergency funding in June and should be sufficient for two years trading.

The rescue deal involves widespread board changes, including the replacement of founder Michael Waller-Bridge as chief executive and the removal from the board of Stephen Wilson, founding director and Paul Barnes, finance director. A new chief executive is expected to be appointed within three months.

Apax Partners is leading the financing with a pounds 6m investment giving it a 29 per cent stake in Tradepoint and has appointed Ronald Cohen, its chairman, as a non executive director at Tradepoint. Mr Cohen said he was confident in the growing importance of electronic trading: "We believe that demand is growing for electronic trading in Europe. Experience in the US shows there's room for at least one other player."

Tradepoint, whose shares returned to the market at 65p yesterday following suspension at 70p pending the announcement, was established in 1995 to try to break the Stock Exchange's monopoly on UK share trades. However it faces competition when the Stock Exchange launches its own electronic system in October and has been slow to reach its break even target of 2 per cent of UK equity trades.

Though both Mr Wilson and Mr Barnes will continue their executive responsibilities within Tradepoint and Mr Waller-Bridge may take a role within the company, Mr Cohen acknowledged that the board changes reflected the need for more experienced management. "It is not more experience in exchanges that the board needs, but more in managing a relatively substantial organisation," he said yesterday, speaking from Israel. Tradepoint's board will be strengthened by the appointment of four non-executive directors including Stanislas Yassukovich, chairman of Easdaq, the Pan European exchange for high tech companies.

Mr Waller-Bridge denied that the company had been effectively taken over and said the new board reflected the structure of more traditional exchanges: "We always planned that the board would evolve. Founding a company and creating a platform for growth needs a very different set of skills from operational growth."

He said he was delighted with the deal: "We have achieved the objective of creating, launching and developing a new exchange. We have proved that Tradepoint has operational robustness. June was our best month in volumes and value of trading and we are within an ace of our first pounds 1bn trade. It was always our plan to bring a substantive financing package to lay the foundations for future growth. This puts us on a very firm financial footing with very serious shareholders and a board which is more like a traditional stock exchange."

Other investors include three venture capitalists and three inter-dealer brokers include Electra Flemimg which has invested pounds 1.5m and Tullett & Tokyo Forex and United Broking who have invested pounds 1m each.