FORMER PAYZONE executives John Nagle and John Williamson, who were sacked by the group last March, are preparing to wrestle control of the e-payments business back from investment group Balderton Capital, which owns 54 per cent and is headed by Irishman Barry Maloney.
This follows a move by the troubled Dublin-based Payzone to refinance its hefty €276 million net debt which is held with a syndicate of seven banks led by Royal Bank of Scotland.
It is understood that the company has held talks with the banks with a view to them swapping debt for a large equity stake in the business. This would dilute other shareholders and see the banks effectively write off roughly half their loans to the company.
Mr Nagle, who was Payzone’s chief executive, and Mr Williamson, a former finance director with the Irish company, are believed to be preparing an alternative proposal that they intend to put before the banking syndicate.
The pair own 12 per cent of Payzone between them. The surprise move would involve the two regaining control of the business, focusing on its core Irish and UK operations and offloading other assets to industry players.
This proposal is likely to involve the banks taking some equity in the business but at a lower level than that being proposed by Payzone.
At its annual general meeting in Dublin yesterday, Payzone told shareholders that it had “instigated discussions with its finance providers covering a range of financing options with a view to establishing a more appropriate long term capital structure”.
When contacted by The Irish Times, Payzone chief executive Mike Maloney declined to comment on how it might achieve this, adding that an agreement was likely within eight to 10 weeks.
“No decisions have been made yet with the syndicate around any form of restructuring,” he said. “There are lots of ways it can be done.”
Mr Maloney said Payzone “does not generate enough cash to support its debt structure”.
Payzone is currently trying to sell its business in Germany. It is believed to have received three offers – from Lekkerland, Euronet and Easycash – and a sale could net it €50 million or more.
Mr Maloney declined to comment on this.
In January, Payzone announced total losses of €206 million for the year to the end of September 2008 on revenues of just under €1.1 billion. It recently sold its businesses in France, Italy and Spain and last month it emerged that the company was seeking 27 redundancies at its Dublin head office.
Payzone was formed from the merger of Dublin-based payments top-up group Alphyra, which was founded by Mr Nagle, and UK ATM operator Cardpoint in 2007.
Its shares debuted in London at 76 pence but have collapsed in value to just 1.38 pence. Its market value is £6 million.
