UKFast rules out Outsourcery rescue deal
LAWRENCE Jones, the owner of UKFast, has ruled out a deal to rescue Outsourcery – the Manchester cloud services business owned by ex-Dragon Piers Linney which is teetering on the brink of administration.
Last week, shares in Outsourcery were suspended and shareholders were told they were at risk of getting “no, or limited value” from their investment.
At the time the company said: “Outsourcery has received a number of initial offers for its assets, though the potential proceeds from the current proposals would potentially leave no or limited value to equity shareholders. The board continues to carefully evaluate approaches for assets as well as a number of further options to strengthen the immediate and long-term financial position of the company.”
EY has been appointed to find a buyer for the business with an agreement to pay Vodafone back the £5m+ it is understood to have loaned the business. Failure to sell the business could result in it entering administration.
Jones today confirmed to TheBusinessDesk that UKFast has been in talks to buy the company, in which he personally invested £1m nine months ago, but said that those talks had now ceased.
He said: “It’s not an opportunity we are exploring at this stage. I personally invested £1m last year with very good intentions and to try and help them – that was on the basis that we could influence and help to drive the right decisions. When I made that investment, we were looking at finding a way to buy the business in the long-term.
“In business you make mistakes and you have to minimise those and learn from them. It was a mistake but also a lesson learned.
“I would need certainty that I could turn the business around and it would mean spending a lot of my own time on that. Our own business is in the strongest position it has ever been in and so I am putting my energy into that.”
TheBusinessDesk understands the most likely outcome is that the business will be broken up and sold to a Vodafone partner, who will take the business out of administration without liabilities and start again.
Earlier today The Times reported that Linney has sent a sharply worded letter to Vittorio Colao, chief executive of Vodafone, to complain that the mobile network is responsible for the plight of Outsourcery.
The mobile network has twice provided funding to stop Outsourcery running out of cash as it has a commercial partnership with the cloud computing business. However, sales to the mobile company’s huge base of corporate and public sector customers have been weak.
A spokesperson for Vodafone told The Times: “We cannot… be held responsible for how Outsourcery management have chosen to run their company.”
