Baltimore may face liquidation

BALTIMORE Technologies may be put into liquidation as early as next March.

In a letter to its 50,000 shareholders, the company said that being placed in voluntary liquidation with surplus cash distributed back to long-suffering investors was an option.

The move is one of a range of options being considered by chief executive Bijan Khezri.

He told shareholders there were two alternatives now it has sold off all of its remaining security and software division. The first is to put the company into voluntary liquidation next year and distribute what is left of its cash pile to shareholders, worth around 50p per share.

The second choice is to acquire another business and develop a new strategy for Baltimore.

"In either case, the complex legacy of Baltimore's remaining global legal, tax and property liabilities need to be resolved first. However, the board is extremely well-equipped in terms of knowledge and expertise to address all outstanding legacy issues and to realise the value of our remaining non-cash assets. We are currently working hard to achieve this and I expect the process to take until June next year.

"I therefore want to reassure you that, in parallel, the board is also proactively evaluating business acquisition opportunities," said Mr Khezri in the letter.

A third option is a reverse takeover allowing a private company to back itself into Baltimore to use a London quote.

He added that it expects the issue to be finalised by the next full year's financial results announcement in March 2004.

Any decision on either the liquidation or acquisition would be up to shareholders to vote on. The company said it was looking at a way to enable shareholders who hold only a small amount to sell them cheaply.

Since his appointment following the departure of founder Fran Rooney on 2001, Mr Khezri has set about cutting Baltimore's losses, which were running at £5.9 million a month.

The company has £41m in cash after the sale of its operating divisions, the last of which was sold in Tuesday.

Baltimore shares were trading at 35.5p yesterday, valuing the company at £17 million. Three years ago the company was a member of the FTSE100 and valued at £7 billion. Baltimore shares slumped after the technology bubble burst and a series of profits warnings from the company.

Speculation that a takeover of Baltimore is the more likely option were heightened yesterday with the listed corporate raider Acquisitor Holdings upping its stake to 6.13%.

Acquisitor is a special investment fund which only invests in company's that are takeover targets.

Its stake in Baltimore has double in the past couple of months.