The Bournemouth-based software engineering company, Systematica Ltd, has been placed in receivership after Barclays Bank Plc called in Ernst & Young at the directors’ request. The company says that lack of investment and a slowdown in sales caused its current difficulties, and commentators say the situation has been developing for some time and comes as no surprise. The consensus is that Systematica made large investments in staff and in its Virtual Software Factory product on the basis of expectations that did not materialise. Consequently, when Systematica asked its backers for further money to weather the downturn in sales and cash crisis, the main investors – IBM UK and Venturelink – declined. IBM UK, which acquired 20% of Systematica’s equity in 1990, has provided financial assistance over the past few months, and Jason Ellis of Ernst & Young says that IBM has been very supportive in the past, and probably wants to be supportive in the future – although it seems unlikely that will take the form of hard cash. Ellis anticipates that the realisation of Systematica’s assets will be completed within a few weeks and a management bid for the assets of the company is one possibility, although Ellis says that there are several interested parties.
