Is this the end for Tiscali?
March 19, 2009 at 12:45 pm
It looks like Tiscali could soon become one of the latest high-profile victims of the recession. The Milan-based company has recently been in talks with BSkyB concerning the sale of its UK operations in a bid to pay back the vast debt that it owes, but it now appears that the negotiations have fallen through.
It was hoped that a sale could be reached by the end of March, but the company has stated that it is now “de facto impossible” to continue negotiations with Sky.
It was thought that Tiscali would be able to sell the UK part of the company for £600 million in order to pay off its debts, and that the talks broke down because Sky only offered £350 million.
As a result of the news that it was trying to sell up, trading in shares was suspended. After the talks with Sky fell through, the company asked the banks to suspend the interest repayments it owes on its €557 million debt. It has just been announced that the banks have agreed to suspend the debt repayments, and this will give Tiscali a chance to work out a new financial plan.
Tiscali has been having a hard time lately. It has been struggling with the fierce competition in the UK market, and although it was once one of the biggest providers in Europe, its markets have shrunk from fifteen to just two – Italy and the UK.
The company has stated that its customers will not be affected by the recent goings on, and that they will not experience any changes in the services they are currently receiving.
Whether the company will survive or not is yet to be seen. But what is certain is that if it does fail, the other providers in the UK will be quick to try and tempt its customers.
