Tiscali's future in doubt after Sky deal collapses

 

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By Barry Collins

Posted on 9 Mar 2009 at 12:59

Tiscali has cancelled talks with Sky over the sale of its UK business - sparking fears about the long-term prospects of the company.

Tiscali, which has 1.8 million British subscribers across its various brands, has been attempting to sell its UK business since last year.

Both Sky and Carphone Warehouse were among potential suitors, but over the weekend Tiscali announced talks with Sky have reached an impasse. The company claimed takeover talks were "de facto impossible" in the current economic slump.

Tiscali subsequently revealed it would miss an interest payment on its reported 500 million Euro debt, leading the company's share price to fall 40% before trading in Tiscali stock was suspended by the Italian stock exchange this morning.

Tiscali has asked for interest payments to be suspended while it attempts to restructure the huge debt.

The announcement is something of a vindication for BT, which last year sent a mailshot to Tiscali customers, casting doubt over the company's future.

Tiscali subsequently started legal proceedings against BT, claiming "defamation and malicious falsehood".

Tiscali was unavailable for comment at the time of publication.