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The retail dot-com implosion reached Europe’s public stock markets December 29 when European Internet retailer LetsBuyIt.com NV filed for bankruptcy protection. Previous high-profile European e-commerce bankruptcies have featured privately held startups such as Boo.com PLC and Clickmango.com PLC. But LetsBuyIt.com’s demise would be the most high-profile failure by a publicly traded European Internet company to date. The publicly traded Dutch company filed a so-called provisional moratorium in the Netherlands — akin to Chapter 11 bankruptcy protection in the U.S. — while it desperately seeks a strategic or financial investor. In the meantime, the company has deferred its debt payments and stopped taking new orders on its Web site. “We need a bit of breathing space to get a clear picture of our cash position,” said Martin Coles, LetsBuyIt.com’s CEO. Shares of the company trading on Germany’s Neuer Markt were suspended December 29 after declining 6 percent to 1.25 euros ($1.17) in December 28 trading. The moratorium filing and the subsequent appointment of a trustee by a Dutch court this week could be the first step toward liquidation. “At some point, if all options are exhausted, the responsible thing is to liquidate the company,” Coles said. He said the deadline by when the company would need to raise capital and the exact amount of money needed to stave off bankruptcy would become much clearer after the court-appointed trustee analyzes the company’s books. Coles declined to comment on how much money the company possesses. LetsBuyIt.com employs 350 people across Europe and allows users to buy goods online in groups at discounts. Founded in Sweden in January 1999, LetsBuyIt.com is working with Robertson Stephens International, the San Francisco-based investment bank that lead managed the company’s July initial public offering, to raise money. A firm spokeswoman in London declined to comment. PricewaterhouseCoopers is the company’s auditor. During its IPO, LetsBuyIt.com originally sought to raise 180 million euros. However, when the markets declined, the company slashed its expectations, lowered its price, and raised only 66 million euros at 3.50 euros per share. Coles explained that it was always part of the company’s plan to return to the markets for the additional capital it needed to make it profitable by December 2002. But the continued decline of the stock market has prevented the company from conducting a follow-on offering or successfully raising capital in the private equity markets. “The whole market has gone completely sideways,” Coles said. “You have to be a risk-free proposition to gather any investor sentiment in this space,” he added. LetsBuyIt.com is open to strategic or financial investors. But he cited market conditions for e-commerce companies as the main obstacle to cutting a deal. “If we could pull together a partnership with a bricks-and-mortar player, we could get funding relatively easily,” Coles said. “We have a few interested parties out there, but the time between which you start conversations and complete deals does not take two weeks. It takes months.” When a court-appointed trustee begins work this week, LetsBuyIt.com will begin to find out if it has that long. Copyright (c)2000 TDD, LLC. All rights reserved.

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