ISoft sale ‘one of the options’

ISoft is planning to sell its iSoft Business Solutions subsidiary, according to the Sunday Times.

The newspaper claims that the software firm – which is in negotiations with its bankers over debts of AUS $240m (£152m) – is planning to offload the subsidiary, which designs finance systems for the NHS.

The paper reports that iSoft Business Solutions has offices in Dublin and Belfast and made a loss of £634,000 last year despite sales of £3.5m. It says iSoft has yet to find a buyer.

ISoft declined to comment on the sale. However, during its annual general meeting last week, chairman Robert Moran said: “We have previously announced that we are considering a limited number of asset sales or business closures in order to reduce debt and improve cash flow. This process continues.”

During a Q&A session at the end of the meeting, one shareholder asked if selling the whole business was possible. Moran said: “Yes, it’s one of the options.”

He also said the company is “carrying too much debt for the level of trading of the business” and that “this needs to be rectified.”

ISoft is working with UBS to pay down debt and conduct a massive restructure of the business. This includes reducing its headcount by 25% from 4,600 to 3,500 and “sun-setting” some iSoft products.

During the AGM, Moran also welcomed Andrea Fiumicelli as iSoft’s new chief executive. Fiumicelli has been acting chief executive since former executive chairman and chief executive Gary Cohen stood down in September.

However, Moran said that he would stand down as chairman so that an independent chairman could be appointed.

Moran, who is also managing director of iSoft’s largest shareholder, Oceania Capital Partners, will continue as a non executive director.

Two long standing directors, Peter Wise and Claire Jackson will also stand down.

ISoft is one of the main software suppliers contracted by the National Programme for IT in the NHS. CSC is due to install its Lorenzo electronic patient record in the North, Midlands and East of England.

However, this summer iSoft blamed delays to the programme for hitting its revenues. The company also has a substantial base of NHS trusts using systems developed before the programme was launched in 2002.

ISoft’s shares have lost more than 90% of their value during the past year, and are now trading at 8 Australian cents.

Links: Addresses made by Robert Moran and Andrea Fiumicelli to the iSoft annual general meeting.

The Times story (paywall protected).