Auditors cast doubt on Tiscali's future

 

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By Dave Stevenson

Posted on 16 Apr 2009 at 12:19

Tiscali's future has been plunged into doubt by its auditor, which has refused to sign off the ISP's 2008 accounts citing "fundamental uncertainties on the business continuity".

The Italian company is reported to have debts of more than £5 million, although in a statement Tiscali says that it has "already obtained a period of standstill from the lending banks until June 2009."

It also says it is "in disagreement" with the auditor, Ernst and Young, over its refusal to sign off the accounts. It says that it believes "it has co-operated at best and that it has provided all the information necessary to enable the independent auditors to issue an audit opinion on its 2008 financial statements."

Tiscali's shares dropped nearly 6.5% at the news, and the New York Times is reporting that it now has until the end of 2009 to work out new lending arrangements with its debtors.

The company descended into chaos last month when a proposed £350 million sale to BSkyB fell through, with BSkyB rejecting Tiscali's valuation of itself at more than £500 million.

Tiscali used to operate in 15 European countries, but since 2004 its markets have dwindled to just Italy and the UK. It offers both broadband and dial-up accounts, and is the fifth-largest ISP in the UK with just under 1.8 million account holders.