August 3, 2007 / 12:24 PM / 12 years ago

Mobile banking firm Meridea files for bankruptcy

HELSINKI, Aug 3 (Reuters) - Finnish software firm Meridea said on Friday it has filed for bankruptcy after unfruitful merger talks and lack of financing, having failed to capitalise on consumers’ need to access financial services via cellphones.

The firm — owned by Nokia NOK1V.HE, insurer Sampo SAMAS.HE and private equity firm 3i (III.L) — is set to continue negotiations to sell its product rights to those keen on continuing its business, its Chief Executive Jukka Riivari said.

“We were in talks on a quite large merger deal which foundered, and we ended in a difficult position in a short period of time where we could not arrange financing,” Riivari told Reuters.

“With an acquisition we were seeking to expand more quickly as competition was increasing. Our biggest problem was our timing.”

Riivari said the mobile banking venture had been started ahead of its time, meaning it relied on heavy financing along the way. He said it was only this year that the market had begun to grow. In a Reuters interview in 2005 the company expected annual sales of 20 million euros for 2007, compared with 5-7 million estimated for 2005.

Meridea’s product was a programme enabling secure financial transactions on cellphones, and the company offered it to banks and other financial institutions, but it also expected to find new customers among airlines and retailers.

Meridea told Reuters in 2005 its owners had a plan to exit the firm by 2007 and at the time they preferred an initial public offering.

“The share capital has been lost but the owners are large, due to which this has not been a material loss to them,” Riivari said on Friday.

One of the owners, Sampo, said the bankruptcy did not have a financial impact on it. Others were unavailable for comment.

Meridea had filed for bankruptcy on Thursday.

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