In an interview at USi's Annapolis, Md., headquarters, Chief Executive Andrew Stern remained positive about the company's prospects. That's the story. I'm absolutely confident that this business is happening and our model is the right model. At the same time, Stern says USi is trying to sell an equity stake to private investors after failing to close a revolving credit agreement with GE Capital. To reduce capital expenditures, USi will no longer insist on owning its own data centers, a departure from one of the company's defining strategies.
Analysts say financing is very possible, but no sure thing.
There is a solid chance that they'll secure financing at some price, probably a low one. Without funding by the end of the year, USi could end up an acquisition target, he adds. Stern says the company is in detailed discussions with a possible strategic partner, which he would not identify. The company landed 45 new service contracts. USi, which has about 170 customers, hosts and manages applications from vendors such as Microsoft, People Soft and Siebel Systems.