Struggling online directory firm Scoot.com has agreed to sell its Loot classifed advertising businesses in Britain and Ireland for �45m in cash, to the owners of the Daily Mail newspaper.

The sale price is a quarter of the �180m that Scoot paid to buy Loot last July.

Acknowledging the extent of its financial difficulties, Scoot said the sale and a bridging loan would give it "sufficient working capital to trade beyond 27 August 2001 and at least until the beginning of October 2001".

It said the �10.5m loan from a subsidiary of Daily Mail & General Trust will give it �7m of working capital after repayment of bank loans of �3.5m. It will pay 7% interest on the new loan.

US and Pakistan Loot kept

"Scoot and DMGT are in discussions regarding an ongoing commercial relationship between Scoot and the Loot business," the online directory firm said.

For now, Scoot will retain Loot's operations in the United States and Pakistan but it said it is in talks to sell these publications. It has already sold the Indian version of the advertising magazine.

In July 2001 Scoot, once at the forefront of international expansion via the worldwide web, said it would retreat to its core markets, shelving plans to expand into Germany, Spain and Portugual.

The statement came a week after Scoot chief executive Robert Bonnier resigned and the firm said it was to cut 285 jobs and implement a strategy shake-up.

At that time, the company said it hoped to operate at a profit by the end of 2002. Scoot announced losses of �9.5m for the first three months of this year.

Only business in profit

The sale of Loot UK seems unlikely to bring profitability any closer - it was the only business within Scoot to run at a profit in the first three months of this year and increased its sales to �6.4m, up �800,000 on the previous three months.

Furthermore, the sale price for Loot was below the value analysts were putting on the business at the time of the restructuring announcement, when it was expected to fetch about 50% of the purchase price.

Scoot has already sold its 50% stake in Scoot Europe to partner Vivendi Universal, the French media and utilities giant, for a nominal one euro (62 pence).