UK software house AIT Group has announced plans to terminate a support services deal with a sub-contractor and is to raise £750,000 through a share placing to pay for the transition costs.
In a statement to the Stock Exchange, AIT says that the support services contract currently in place with the sub-contractor is no longer in the best interests of the company. The vendor has declined to name the sub-contractor or its parent company.
AIT has agreed to pay approximately £600,000 as a combination of cash (£400,000) by way of termination payment, together with payments for transition services over the next three months (estimated at approximately £200,000). An additional £150,000 internal costs will be incurred in the provision of new capital equipment to take support inhouse.
The termination and transition costs will be funded by a placing of 2.1 million shares at a price of 35 pence per share.
Nick Randall, AIT chief executive says: "Our new plans will enable us to achieve substantial ongoing cost savings, while at the same time enabling AIT to provide more direct product and application support to the 150 customers who use our customer interaction software worldwide."