Tiscali on the Rocks
Tiscali have become the latest technology company to run into recession related trouble after their stock plummeted 40 per cent earlier this week. This drop has left the company’s valuation floundering at a pitiful €100 million Euros.
The company is heavily in debt and, by its own admission, needs a serious restructuring drive in order to survive. This is all a big change from last week when they had been hoping to wipe their debts completely by selling their UK business to BSKYB. Unfortunately for Tiscali, that deal fell through and any remaining faith that investors had in the company evaporated, leading to this week’s catastrophic share-price drop.
The troublesome Tiscali debts amount to about €500 million Euros, that’s made up of two €50 million credit facilities and a €400 million loan. All told, it amounts to five times the company’s current market value. You don’t have to be an economist to know that’s not good.
Tiscali’s downfall could be bad news for many UK internet users. Tiscali provides broadband to around 1.7 million UK customers after growing through their acquisition on Pipex broadband.
Trading in shares of the Italian company was suspended in Milan on Monday.
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