Home broadband, phone and TV provider Tiscali was dealt a fresh blow today after the ISP revealed its auditors had refused to sign off its accounts.
Tiscali, which was rated below average by Which? members in the latest Which? broadband satisfaction survey, has been under pressure since a sale of its UK business to satellite TV company Sky collapsed earlier this year.
At the time the phone and broadband company said worsening market conditions made it ‘impossible to proceed with a deal with Sky‘.
Tiscali’s financial pressures grow
Tiscali’s auditors – Ernst & Young – warned of ‘fundamental uncertainties’ on business continuity and said it was not able to give an opinion on Tiscali’s full-year results.
The auditors said that Tiscali, which had almost 1.8 million UK broadband customers at the end of September last year, could only continue if it renegotiated its debts with lenders.
The Italian-based firm put the division up for sale last year as it sought to reduce its debts, which are now thought to stand at around 600 million euros (£531m).
Tiscali loss reduction plan
Tiscali contested the auditors’ conclusions and said it would propose a plan to reduce the firm’s losses at a shareholder meeting later this month. In a statement the broadband company said it had already agreed a standstill arrangement with banks until June.
Tiscali said lenders had indicated in writing that they would be prepared to extend this until the end of 2009.
Carphone Warehouse, parent company of broadband provider TalkTalk, has reportedly also had its eyes on the UK broadband business, but a bid has yet to materialise.
In a statement on the broadband website Top 10 Broadband, Tiscali spokesperson Jody Haskayne says: ‘We can assure customers that there will be no impact on their broadband services and support of services will continue as usual. We are confident of the future of our business.’
Which? answers your questions about broadband ISPs in the Which? broadband review. If you’re concerned about the future of your phone or broadband company, the FAQs section of the Which? broadband review gives advice on your rights.
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