K*Grind to cut costs with new partner

K*Grind has spent the past few weeks searching for new investors after an initial $10 million investment by major shareholders, Macquarie Technology Funds Management, AMWIN, Acer and Wavelink Capital, had dried-up.

The company is believed to have burnt through around $1 million a month for the last 10 months.

However, according to the new investors -- property developer, MetroLand and Union Pacific Limited (UPL) - the spending will stop.

Under a joint venture agreement, MetroLand and UPL will invest an initial $1million in K*Grind. A further $4 million will be injected following the completion of due diligence and formal documentation. In return, MetroLand and UPL will take a 51 per cent stake in K*Grind.

An additional condition of the agreement was the demand that K*Grind curb its capital expenditure, Gary Lewis, MetroLand company spokesman said.

"The burn rate has to be cut," Lewis said. "We don't intend to be burning $5 million like the previous (market) did."

Lewis said the $5 million cash injection would have to last at least 12 months, and K*Grind's 100 staff would be "under review".

"(Staff numbers) will change - we don't know to what extent," he said.

In addition to the much needed cash, MetroLand brings to K*Grind a new Asian revenue stream. David Keane, company spokesman for K*Grind said the agreement provides a means to expand into Asia.

"In Asia broadband has happened. In most large organisations its huge," he said.

Keane said additional revenue will also be generated through the sale of K*Grind's proprietary back-end systems, software and solutions. The company is already in discussion with a number organisations, he said.

Despite only raising $5 million in the deal - K*Grind was believed to be seeking funding between $10 million and $20 million - Keane said the company will stop searching for investors. "We think we've done a good deal for the long term business," he said.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Luisa Bustos

PC World

Comments

Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?