Stepstone to raise up to £22m with shares issue

Stepstone, the beleaguered internet recruitment group, outlined a rescue plan yesterday designed to raise more money in a last-ditch effort to stave off collapse.

The Norway-based business, whose shares are listed in London and Oslo, said it planned to raise 20m to 35m euros (£12m to £22m) by issuing shares.

The move came after the company's warning last week that it would be unable to continue to trade "as a going concern" if it did not secure fresh funding. The alert accompanied a restructuring that saw the group axe about 500 jobs and put its UK arm into liquidation.

Stepstone is understood to be planning to raise about 25m euros in its share issue from a mix of existing and new investors. Discussions are said to be "well advanced" and involve both Orkla and Skandinaviska, its two biggest shareholders.

Stepstone said it expected to get "advance subscription commitments" for the new shares "in the near future", and said the stock would be sold at 0.02 to 1 Norwegian kroner a share.

A spokesperson for Stepstone said the 25m euro figure would be sufficient to take the company to profitability but refused to indicate when it might reach break-even.

Stepstone will update the market on its progress either before or at its 20 November extraordinary general meeting, scheduled to approve the plan. It is also thought to be looking to raise a further 5m euros through a rights issue.

Shares in the company, which were listed at the peak of the internet boom in March of last year, fell 3 per cent yesterday to Nkr0.31. At one point, the stock had traded as high as Nkr51.5.

The company said last week that its cash reserves had fallen to 22.5m euros as of 30 September, having burnt through about 24m euros in the second quarter of the year. In the third quarter, the group recorded a loss of 30m euros.