Tiscali gets breathing space from bankers

Chris Forrester

Troubled Italian broadband company Tiscali said March 27 that its creditor banks had agreed to restructure Tiscali’s loan repayments.

Tiscali is Italy's third-largest internet provider by market share, and has a major business in the UK. It had asked its bankers to suspend interest payments on March 6 after negotiations to sell its UK assets to British pay-TV firm BSkyB failed following the deterioration in market conditions.

The Cagliari-based company said in a statement it also approved the guidelines of a new business plan and it named AT Kearney and Rothschild as industrial and financial advisors. “The board believes all requisites are there to be confident in the positive conclusion with talks with banks and thus in the finalisation of a restructuring agreement," Tiscali said.

Net debt at the end of 2008 was €601m ($806m), compared with €637m at the end of 2007 and its disposable cash fell to €24m from €134m at this time last year. Intesa Sanpaolo SpA, Italy’s biggest bank, and JP Morgan Chase originally underwrote the company’s long-term debt. Tiscali also reported a sharp increase in its 2008 net loss to €242.7m from €65.3m.

Revenues rose 11% to €983.6m. EBITDA jumped 24% compared with the previous year to €197m, Tiscali said. Tiscali shares fell 1.8% to 0.432 euros on Friday, underperforming a 0.76% fall in Milan's Mibtel index.