Shares in Tiscali have been suspended on the Italian stock exchange after tumbling almost 50 per cent this morning on news it failed to meet a debt repayment.
The group - whose UK ISP brands include Tiscali, Pipex, Freedom2Surf and Nildram - said over the weekend it would try to renegotiate its loan agreements. Tiscali owes banks about €500m.
The board had hoped a sale of UK assets would help meet the repayments, but a long-running auction failed to attract a buyer. Talks with BSkyB, the last remaining bidder, had become "impossible to proceed", Tiscali told investors in a statement.
Tiscali had reportedly demanded £600m for its 1.77m UK subscribers, which make it the fifth largest broadband provider behind BT, Virgin Media, Carphone Warehouse and BSkyB. The latter refused to pay more than £450m, according to unconfirmed reports.
The impasse means Tiscali executives will be forced to ask banks for more generous loan terms. Meanwhile the potential for bankruptcy and loss of internet access is likely to spook the firm's already-dwindling UK customer base. ®