Tradepoint set to seek pounds 9m

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The Independent Online
Tradepoint, the Aim-listed rival to the London Stock Exchange, was forced to confirm yesterday that it needed to raise money following rumours that it was in financial difficulty.

Though the group's statement gave no details of the fund-raising, it is expected to announce a private placing of less than pounds 1m this week and is seeking to raise up to pounds 9m in a public offering - probably involving a placing and open offer - before the autumn.

The group, which launched an order-driven electronic stock market in September 1995 to rival the Stock Exchange's monopoly on UK equity trading, is thought to be running low on cash.

Sources suggest that even with this week's new funds, it has just a few months' money left. Advisers to the company are thought to be seeking to raise around pounds 10m in total, enough funding to cover around a year's costs and to take the group to profitability.

Michael Waller-Bridge, Tradepoint's chief executive, said: "We want to get away from the short term financing we have used in the past and put long term money in place."

Since the group formed it has raised around pounds 20m. Mr Waller-Bridge said that Tradepoint had no debt, but he would not disclose how much cash the group had left.

"We've built our exchange, we have the confidence of our shareholders and this trading period is the best for a year. We are on course to break even by the end of this year," Mr Waller-Bridge added.

However, some analysts have raised concerns that the group will run out of money before it hits its target of 2 per cent of UK equity trades, the volume required for it to break even.

One said: "Building up this business takes time. We don't expect the group to hit break even for 12 months."

From October, Tradepoint will also have to compete directly with the Stock Exchange's own order-driven system.

Listed at 175p, the group's shares were unchanged yesterday at 95p.