Tiscali fights for life after UK sale collapse

[DaBees-Knees]

http://business.timesonline.co.uk/tol/business/industry_sectors/telecoms/article5874543.ece

Tiscali, Britain's fifth-biggest internet provider, is fighting for survival after asking its banks to suspend its loan repayments. Shares in the Italian-owned group were suspended this morning as investors digested its statement, late on Friday, announcing the collapse of its planned sale of its UK assets to BSkyB, the satellite broadcaster that is 39.1 per cent owned by News Corporation, parent company of The Times and Times Online, and its uncertain financial situation. In the statement Tiscali, which employs 750 people in the UK, said it would ask its banks to suspend its interest and capital repayments while it restructured its finances. JPMorgan, the group's main debt holder, is weighing up its options but analysts said that administration looked like one likely option. Tiscali has net debt of €557 million (£508 million). Its next deadlines for interest payments totalling €11 million are Wednesday and Friday. The internet group, which has long had its ambitions curtailed by financial constraints, had hoped to sell its UK assets to BSkyB. However, Sky is understood to have offered only about £350 million, far short of the £500 million to £600 million that Tiscali had demanded for its 1.77 million UK subscribers and that would have helped it to meet its debt repayments. In a note today titled Running on Empty, Citigroup, the bank, said that although Tiscali's assets might "eventually" be sold, it "increasingly fears that shareholders would not be the main beneficiaries of such forced disposals". Enders Analysis described the business as a "wasting asset." Tiscali, once one of Europe's biggest internet providers, has seen its 15 markets dwindle to only two, Italy and the UK. It was founded in 1998 by Renato Soru, the entrepreneur who is also regional president of Sardinia. He invested $600,000 of his own money in the business. Over the past few years under the leadership of Mary Turner, the UK business has fought hard to cement itself in the hugely competitive market place. In 2006 it merged with HomeChoice, the niche video-on-demand group. A year later it paid £210 million for the voice and broadband units of Pipex. Buyers had been tempted by its infrastructure — the group has led the way in placing its own equipment in BT exchanges, a process known as "local loop unbundling" as well as its subscriber base — but not at any price.

Not good news. The last thing we want to see is a monopoly of a few ISP's.

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Hope they go bust ... perhaps if they didnt bull**** everyone and throttle p2p so bad they might be no 1 instead of 5 and sinking ..... also hope there customer support people never get another job in the industry as they are the worst ever and thats saying something considering the competion lol