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Velti sells businesses, subsidiary plans closing

The Associated Press

Mobclix, a subsidiary of the mobile marketing company Velti, will wind down its business through a Chapter 7 bankruptcy, the parent company said Monday. Some of its other businesses will be sold to the credit division of private equity firm The Blackstone Group LP.

Mobclix is the only Velti business that will cease operations, the Irish company said. Separately, it has agreed to sell its U.S., U.K. and India mobile marketing businesses and some of its U.S.-based advertising business to Blackstone's GSO Capital Partners LP.

Velti's U.S. operations, which include Velti Inc. and Air2Web Inc., filed Chapter 11 petitions with the U.S. Bankruptcy Court for the District of Delaware as part of the deal. GSO will assume responsibility for about $57.5 million in debt that Velti was struggling to pay and will provide up to $25 million in debtor-in-possession financing to the businesses included in the sale.

Velti's remaining business will include global operations in Greece, India, and the United Arab Emirates, among other countries, as well as part of its U.S. advertising business.

The sale is expected to close by the end of this year.

Shares of Velti fell about 21 cents to roughly 8 cents per share at the start of trading Monday. The company's stock had shed more than 93 percent of its value so far this year, as of Friday. It has traded between 7 cents and $7.55 over the past year.