Bonnier quits as cash crisis looms at troubled Scoot

Vivendi Universal faces 280m euros write-off for its investment in controversial Net directories company

Scoot, the troubled online directories business, faced a fresh crisis yesterday when it parted company with its chief executive Robert Bonnier and announced that it had only three months of cash left. Mr Bonnier and Ronald Dorjee, its chief financial officer, have both left with immediate effect.

Scoot shares halved in value to a new low of 3.5p, valuing the former high-flier at just £25m. At the peak of the Internet bubble last spring, the stock hit 351.5p, valuing it at £2.5bn.

The company is to cut 285 of its 2,000-strong workforce under a recovery programme called Project Genesis. It will also postpone further geographic expansion and re-examine its charging structure.

Scoot urgently needs to raise money and predicted that it could need an extra £22m of working capital to carry on Loot, the classified advertising paper that Scoot bought only last year. It is up for sale, but few think it would sell for anything even close to the £190m Scoot paid.

"Having announced they are in trouble, they are going to get even more squeezed financially," one analyst said.

The decline and fall of Scoot is one of the most precipitous yet in the dot.com arena. It is the story of the dramatic reinvention of a humdrum Yellow Pages-style directories business into a boom-boom internet stock – which could all along have been more hype than reality. Along the way there have been whiffs of scandal, the hiring of private investigators, a serious amount of mud-slinging and seemingly endless investigations into alleged stock price manipulation.

It is also the story of the rise and fall of Mr Bonnier, the 32- year-old former trader who was once worth £100m but is now out of a job. Scoot also represents a disaster for Vivendi Universal, the French media group that owns 22 per cent of the business. Yesterday it said it would include a provision of 280m euros (£170.1m) in its next results to cover its investment.

Scoot started life as Freepages, which was reversed into a shell company called Blagg and listed on the Alternative Investment Market in 1996. Mr Bonnier became chief executive the same year and the transformation started.

Mr Bonnier is certainly a colourful figure. The former City trader used to drive a metallic grey Porsche 911 and live in a £2m house in west London. But he has sold both to live in Paris. Amid a hectic business life, he's found time to renovate a house in Umbria, Italy, and he owns a "time-share" stake in a private jet.

The stock market always seems to have been his passion. He made his first investments when he was just 13, using the proceeds of an insurance payout from a football accident.

Having borrowed money to fund his purchase of £5.7m of Scoot shares at around 180p last year, he might now face a cash crunch. However, colleagues said he has substantial shareholdings outside of Scoot and so will avoid the need for asset sales.

Born in the Netherlands, Mr Bonnier came to London in 1992 to work for the Swiss Banking Corporation, where he was part of a group of hotshots who were to form the basis of Scoot. One colleague was Ronald Dorjee. Another was Chris Akers who went on to become involved in several shell companies, including Blagg.

Mr Bonnier was described by former colleagues as an ambitious man who was "always too pushy for his own good". He was friendly with Andrew Regan, the young entrepreneur who tried to take over the Co-op four years ago, though they are now at loggerheads.

Yesterday, Mr Bonnier said he had not been told of any investigations into his share dealings, despite City speculation.

Separately, Mr Bonnier was responsible for introducing the Israeli businessman Ronald Zimet to Scoot. Mr Zimet, a friend of the Bonnier family, became chairman of the company when it was called Freepages.

Mr Zimet was also a shareholder of Hobson, Andrew Regan's food company, and was paid £2.4m for securing an extension to Hobson's supply contract for the Co-op.

That deal was included in the Serious Fraud Office's investigation into Andrew Regan's audacious attempt to take over the Co-op in 1997, though there has been no suggestion of wrongdoing by Mr Bonnier.

At the beginning of last year, Mr Bonnier hired a firm of private detectives to look into a dossier on Scoot that was circulating the City. The dossier alleged that Scoot had inflated its subscriber numbers. These allegations were never substantiated.

Scoot's problems have been legion. It has had severe technical difficulties that have prevented it from charging numerous advertisers. Analysts have criticised Scoot for constantly changing its business model and its unwillingness to communicate. Scoot has been at the centre of rumours causing wild swings in its share price. While it swiftly denied speculation that Pacific Century CyberWorks' Richard Li was interested in buying the business, countless stories have surfaced that Vivendi, its major shareholder, was about to make a bid. Vivendi did eventually make a statement but said any offer would be at a price of no more than 15p. Those talks, however, ended earlier this month.

Jon Molyneux, chief executive of Scoot UK, has been appointed chief operating officer and has been made responsible for implementing Project Genesis. David Pearce, the company's financial controller, will take over as chief financial officer until a successor is found.

Scoot is postponing its planned geographic expansion into Italy, Spain, Portugal and Germany until its UK business is making profits at the operating level. This is forecast for the fourth quarter of this year.

Controversially, the company also plans to start charging for its free-phone 0800 192 192 directories service and estimates that the move could reduce total calls by 63 per cent or more. Revenues now come from charging a fixed fee for online advertising plus a commission for business leads.

Scoot will reports is first- quarter results on 5 July, when a refinancing update is expected. Investors will have their fingers crossed.