Firm caught up in fraud investigation is pre-packed
A COMPANY whose contracts with collapsed Warrington funder Total Asset Finance are at the centre of a Serious Fraud Investigation is under new ownership for the second time in four months.
H2O Networks has been placed into administration by its new owner City Fibre Holdings, and the same management team has bought back its business and assets.
City Fibre Holdings had bought H20 Networks (and sister firms Fibre City Networks, Opencity Media and Wireless City Networks) from former parent firm I3 Group in January this year. I3 Group is owned by Ernst & Young’s 2010 Northern Technology Entrepreneur of the Year, Elfed Thomas.
However, following the collapse of H20 Networks’ financier, Warrington-based Total Asset Finance in February, it was revealed that the Serious Fraud Office were investigating invoices generated between H20 Networks and TAF which had led to a £91m loan book being built. The SFO had been called in by TAF’s funder, Belgian bank KBC, during the latter half of 2010.
City Fibre Holdings said that the pre-pack restructuring deal had been carried out with the full support of KBC, and that it brought to a conclusion “a period of insecurity faced by the customers and suppliers to these businesses”.
CEO Greg Mesch said: “The last few months have been very difficult for all those that have been affected. While restructuring the businesses, it was really important for us to save and protect the customer contracts, and the fibre-to-the-home and metropolitan fibre optic networks.”
Mesch, who was previously chief operating officer of i3 Group, said that the deal would also allow City Fibre Holdings to resume major projects for local authorities in areas such as Bournemouth and Dundee which had stalled following the funding crisis faced by the business.
“We hope that this restructure will come as good news for all those that have been impacted by the abrupt halt to works by our predecessors, including employees, customers, residents in the Fibrecity areas and suppliers,” he said.
“We are extremely pleased that we are now in a position to begin growing a business again.
“We will soon start making good the works left unfinished by our predecessors in Bournemouth. We will begin by repairing the network, adding service providers and activating customers – we already have around 20,000 homes that are or can be connected to superfast fibre in the town.
H20 Networks has more than 120 long term contracts to install broadband systems cheaply through sewer networks. It was working in eight metropolitan areas covering a population of more than 2m people and had also secured deals with organisations such as police forces, healthcare organisations and universities.
