Datalex, a supplier of retail software to airlines, announced on Thursday that it intends to conduct a share sale to pay back €13 million in high-interest loans to Dermot Desmond, its principal backer, as well as to secure operational capital for business expansion. Desmond has offered to prolong the loan’s term for an extra six months to 1st July, 2025, and to provide a new €10 million credit facility if the equity increase is not finalised – these loans have an interest rate of 18 per cent.
With a substantial 41 per cent stake in Datalex, Desmond is a regular loan provider, which has been the case since the firm suffered an accounting debacle five years past. He pledged to rally support for the proposed equity fundraising and partake, so as to maintain his interest level in Datalex, the firm mentioned in its yearly report.
The option to extension and supplementary loans as a contingency proposal has enabled Datalex, under the guidance of Jonathan Rockett since the end of the previous year, to endorse its accounts as a going concern. Essentially, this signifies that the company possesses adequate funds to operate for the upcoming year.
The annual report of Datalex confirmed a 23 per cent revenue rise last year, totalling $29.8 million (€27.8 million), while losses before interest, depreciation, tax, and amortisation fell to $2.9 million from a previous $5.3 million deficit in 2022, as stated in a commercial update.
The global aviation industry recognised the previous year as a revival period as passenger receivership increased and airlines sustained investments in ecommerce tech. In the previous year, Datalex renewed collaborations with airlines including Air China, Air Transat, JetBlue, Edelweiss, and Aer Lingus, some of which have agreed on the firm’s latest platform technologies. Yet, operations with Virgin Australia and Scandinavian airline SAS hit a roadblock, impacting revenues caused by the former’s decision to abandon retail restructuring and SAS’s bankruptcy protection filing which halted a Datalex product deal. It is anticipated that the $3.5 million income from these two customers last year will not recur in 2024.
Datalex entered into an agreement with LatAm Airlines the previous year. Nevertheless, both parties have concurred that although the project reached its primary objectives this month, they’ve collectively opted not to advance any further.
Datalex stated that the venture provided substantial value and learning and it would continue to direct its resources towards jointly innovative undertakings with airlines, focusing on potential areas of strategy and mutual return on investment.
The implementation of an essential project with EasyJet is “moving along nicely,” attaining a significant milestone in December, according to Datalex.