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Ybrant Media Acquisition (YMA), an arm of the BSE-listed Lycos Internet Ltd, has filed for Chapter 11 bankruptcy protection in the US.
The firm seeks protection from the former promoters of Lycos who sold the yesteryear’s search engine firm to the Hyderabad-based Ybrant Digital. (After acquiring the firm for $36 million, Ybrant rechristened itself as Lycos to make itself more appealing to the Western markets.)
Lycos offers digital marketing solutions. It recently entered into IoT products business.
The former promoters reportedly are seeking $34 million to complete the financial transaction, while its buyer contend that it owes only $16 million after paying $20 million at the time of the acquisition in 2010.
Lycos Internet Chairman and Managing Director M Suresh Kumar Reddy told BusinessLine that the firm was in talks with the promoters for an amicable settlement and that it had provided for $16 million in the books towards the remaining payment.
“There is a difference of opinion on the final amount due between the two parties,” he said.
“YMA is a special purpose vehicle established to complete the acquisition and has no significant operations other than related to Lycos ownership. The Chapter 11 filing is only to seek protection (from the likely proceedings by the former Lycos promoters) and it gives us necessary time to continue the talks to arrive at a settlement,” he said.
Reddy insisted that the Chapter 11 filing would have no impact on the overall business activity of the company.
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