7digital Group Plc (AIM: 7DIG) announces that John Aalbers has stepped down as Director of the Company and from his role as Chief Executive Officer with immediate effect. Additionally, Julia Hubbard has stepped down from her role as Chief Financial Officer with immediate effect.
The Board is pleased to announce that Paul Langworthy, the Company’s current Chief Operating Officer who has been involved in devising the revised business strategy, is succeeding John Aalbers as Chief Executive Officer and as a Director of the Company. John has agreed to assist the Company for a period of 3 months to ensure a smooth transition to the new leadership. Michael Juskiewicz, the current CFO of eMusic, will be taking on the Chief Financial Officer duties immediately and will be assisted by Julia Hubbard until mid-September 2019. Julia will remain as a Director of the Company until a UK-based Finance Director can be secured.
John Aalbers commented: “When I joined 7digital in April this year the team and I was immediately challenged with the financial difficulties faced by the Company. We urgently set about looking for ways to refinance the business through a combination of asset sales and fundraising. Three and a half months on, we have largely completed the rescue by securing a new, strategic majority investor, which has stated that it is prepared to invest further funds. The final phase of the fundraising is in progress and we expect an additional £4.5M to be raised in the coming weeks.
“These funds will provide the Company with the necessary resources to implement the revised strategy and put the Company on a solid path towards both growth and profitability. Nevertheless, the Company needs to further consolidate and control our operating costs to support the new model.
“To this end, Julia Hubbard and I have reached the conclusion, and the Board agrees with our recommendation, that it would be in the Company’s interest for me and Julia to step down. Alongside other cost-cutting initiatives already in motion, this will save the company close to £1M per annum, reducing cash burn in the most effective way.
“I will support Paul for a period of 3 months to provide the necessary transition of duties and assist with the implementation of the new strategy. Julia will remain with the business to provide a smooth transition of her responsibilities to Michael Juskiewicz.”
“The Board has made an excellent choice in selecting Paul Langworthy to be my successor. Paul and I have worked closely in devising the new strategy and he is passionate about delivering it. With a lean and focused team under Paul’s leadership, I am confident that 7digital can finally fulfil its potential.”
Chairman, Tamir Koch, said: “I’d like to thank John for his leadership and Julia’s strong support in meeting the financial challenges faced by 7digital and for successfully steering the Company through these rough waters to safety. I also thank John and Julia for continuing to advise and support the company during the upcoming months to ensure a smooth transition to Paul and Michael.”
Incoming CEO, Paul Langworthy, stated: “It’s certainly been a challenging period for 7digital but we are now emerging from that with a clear sense of purpose and excitement. We have a well-defined strategy and we are very determined to execute it. I’m looking forward to taking over the reins from John with whom I have enjoyed working immensely. My confidence in our success is founded on both our new Board, whose ambition and vision will drive the Company forward with real energy, and on our talented team, who have shown enormous resilience during these difficult times. We are ready to take the Company forward as we enter an exciting new chapter.”
The following details in relation to the appointment of Mr Paul Langworthy (aged 43) are disclosed in accordance with Schedule 2(g) of the AIM Rules
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