Fallen star Izodia to become a cash shell

The software company Izodia yesterday gave up the ghost, saying it would shut up shop and turn itself into a cash shell in a move that will almost certainly see the bulk of its 60-strong workforce laid off.

The company, formerly known as Infobank and one of the technology stars of the internet boom of 2000, said simply it planned to close its business. In the absence of a strategic partner, it said it did not think a stand-alone operation based on its software was viable in the current market.

It said it had held "meaningful discussions" with a number of parties and had considered other proposals, including a management buy-out, but had not seen a plan it could recommend to shareholders. "We have made every effort to extract value from the business for the benefit of shareholders and employees, and we have been unsuccessful," said Martin Frost, executive chairman.

He blamed the collapse on the general "lack of confidence", particularly in its market place, and on potential customers choosing to buy software from "larger and more established companies".

Izodia said it would now turn itself into a cash shell and estimated its eventual cash position, net of creditors, would be between 45p and 52p a share. Its shares, which once traded as high as £40.67, closed down 7.5p at 36p.

"The board will oversee the run down of the business, the preservation of any intellectual property rights associated with the software that can be maintained, and that may have value in the future, negotiate with creditors and continue to consult with employees," it said.

However, it ruled out immediately returning money to its shareholders, saying it was "not appropriate" until the position of creditors and liabilities had been settled.

Meanwhile, Izodia said it was considering moving its quotation onto the Alternative Investment Market due to its size and the fact that it would become a cash shell.