April 19, 2018

Swets Gets $55M Cash Infusion, Will Guarantee Prepayments

By LJ Staff

Swets & Zeitlinger shareholders agreed on September 24 to a cash injection of 45 million euros (about $55.4 million) by selling shares to existing shareholders. This was a sum required to maintain the company’s credit after Dutch press reports revealed that accounting problems had turned previously reported profits into a net loss – and alarmed library customers and publishers mindful of potential parallels with the collapose of the divine’s RoweCom/Faxon subscription service. Swets Information Services, the company’s largest division, is the world’s leading subscription agent.

Swets officials said the additional funds would be used to ‘accelerate investments in e-services, strengthen the balance sheet and provide a financially stable basis both for the coming renewal season and for the long-term future.’ In addition, the company also agreed to a ‘multi-year credit facility’ of 150 million euro (about $184.8 million) that will guarantee prepayments made by clients. This could help allay concerns among librarians and publishers regarding Swets’ financial health. When divine collapsed in late 2002, it had taken roughly $75 million in prepayments without delivering subscriptions to libraries or payments to publishers.