LetsBuyIt.com back near the brink

Troubled co-op buying website LetsBuyIt.com is again facing an uncertain future after its chief planning officer quit just days after talks with its main backer collapsed.

After narrowly escaping bankruptcy at the start of the year, a streamlined LetsBuyIt cut 200 of its 350 staff and secured emergency funds of £2.3m (Eu3.8m) from Shmulik Stein International (SSI).

SSI promised another £15.7m (Eu26.2m) out of total backing of £31.1m (Eu52m) to be released once certain undisclosed targets, spread throughout 2001 and 2002, were met.

LetsBuyIt.com said it had met all the scheduled targets, but the additional promised funds have not been forthcoming and new investment terms proposed by SSI were "unacceptable".

"LetsBuyIt.com has relied on these payments for its cashflow plan", the firm admitted.

The firm added that it was now looking for alternative sources of investment and had begun legal proceedings against SSI.

In May, LetsBuyIt.com secured a £15m (Eu25m) equity credit line from New York firm GEM to fund its re-expansion.

But with its share price having fallen 20 per cent since last week, the firm will have to find further funding fast and do so without Rolf Hansen, its chief planning officer.

Hansen resigned earlier this week "on his own request for personal and family reasons", the firm said.

LetsBuyIt.com's last set of results, for the three months to the end of March, suggests it is losing around £2.4m (Eu4m) a month. Shares in the company were trading at 12p (Eu0.20) today [Thursday], down 15p (Eu0.25) on a month ago.