By Charlie Conchie
Scandal-hit data firm WANdisco warned it could run out of cash as soon as mid-July today as it announced an emergency $30m fundraise to bolster its balance sheet following a fraud scandal.
London-listed WANdisco, which was forced to write off over $115m in sales bookings after uncovering “potentially fraudulent irregularities” on its books in April, warned it had $8.1m in cash reserves and would only be able to sustain itself through to mid July.
Bosses are now planning to launch an equity fundraise towards the end of June to “build balance sheet strength”.
“Alongside cost reductions and working capital improvements, the board has determined that raising finance is fundamental to the success of the turnaround plan given the current cash runway extends only until mid-July 2023,” WANdisco said in the announcement.
“WANdisco’s business growth needs to be underpinned by a resilient balance sheet and the proposed fundraise will enable it to build balance sheet strength to take advantage of the significant opportunities available to it.”
The announcement marks the latest turnaround bid launched by the firm after it slashed its headcount by 30 per cent earlier this month and reduced its annual cost base by some $16m.
Former Sage boss and Tech Nation chair Stephen Kelly has been parachuted in to oversee the efforts as interim chief executive, alongside seasoned City chair Ken Lever. Kelly has taken over the reins from founder and chief executive David Richards who left after the irregularities were uncovered.
Bosses say that findings from the fraud probe have pointed to bookings made by “one senior sales employee”.
Kelly and Lever are now working on drawing up a turnaround plan that will cover “all important aspects from sales & marketing through to the company’s governance and control environment”.
The fraud scandal has been a sharp fall to earth for the previously feted Sheffield-based data firm. Just days prior to the initial announcement, the firm had unsettled the City by revealing it was scoping out a listing in the US, where it makes much a sizeable chunk of its revenue.
Shares in the company have been suspended on the AIM exchange since April but the firm said they would look to resume trading “as soon as practicable”.
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