Chrome Global in trouble

The company had been seeking additional funding following a shortfall from a recent rights issue and had arranged for the securities to be placed.

However on Monday the investors due to take up the shortfall got cold feet after learning of a slump in sales.

"This action has arisen as a result of a downturn in sales revenues, particularly over the past two months, and the projected weaker sales cycle that is expected to continue until February 2002," Chrome Global says.

"A high level of economic uncertainty, particularly since September 11 has impacted on Chrome's national sales pipeline with existing and prospective clients either postponing work orders or cancelling contracts."

"On Monday 22nd October 2001 the directors of Chrome were notified by the company's advisers that while arrangements for the placement of all shortfall securities had been all but finalised the sharp fall in revenues meant that the investors did not wish to proceed under the pre-existing arrangements."

Chrome Global shares have been halted from trading and an administrator has been appointed but the company is hoping the problems will be short lived.

"Whilst the company's securities will be suspended during its administration, the directors of the company remain confident that the company will be able to overcome its current difficulties and re-establish itself and the listing in the near future."

CGB says the acquisitions of public relations firms PPR and RHK, which were approved by shareholders last month, have not been settled and both those businesses are operating as usual and not affected by the appointment of an administrator.

"The board remains confident that the synergies identified by Chrome in relation to the proposed PPR and RHK acquisitions are still applicable and will look to work with the administrator to attempt to complete the transactions," the company says.

A meeting of creditors is due to be held next week.

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