2M Invest, the Danish venture capital which announced in May that it was in talks with an unnamed international venture capital firm over the injection of new capital into the struggling firm, has announced that these talks have broken down and that it is to lay off its entire workforce.
2M Invest entered into a framework agreement regarding a strategic alliance with a large international venture capital fund in May that would have provided the firm with DKr150m (E20m) in additional capital. The new partner was also to transfer part of its own IT venture capital portfolio.
On the basis of this agreement, 2M commenced negotiations with a bank consortium for a bridge financing to cover the period until the funding was made available to 2M.
The firm has now revealed that the parties have not been able to reach consensus and that the necessary bridge facility cannot be put into place. As a result, the firm has broken off talks with its potential backers and is currently in developing a restructuring plan.
Last week, Colin Rutherford, executive chairman of Intelli Corporate Finance, resigned from the board of 2M Invest due to personal circumstances which the firm described in a statement to the Danish Stock Exchange as ‘unforeseen at the date of his appointment in April 2002’.
Earlier this year, the firm announced plans to restructure the company in light of results for 2001 which saw the firm make write downs in excess of E45m. As part of the restructuring, 2M announced the closure of its offices in Boston and London.
Speaking to the Daily Deal, 2M Invest president and CEO Michael Mathiesen said that the firm holds to rehire each of the 24 members of staff being made redundant before they are due to leave their offices in late July. Mathiesen added that the firm is currently talking to creditor banks, other investment companies and secondary funds about a deal to keep the business afloat.