Feeds

Genuity pulls plug on European Web Hosting arm

Situations vacant

  • alert
  • submit to reddit

Internet Security Threat Report 2014

ComputerWire: IT Industry Intelligence

Ailing network services and hosting firm Genuity Inc has pulled the plug on its European web hosting business Integra SA after securing a new 30-day lifeline with its banks.

Woburn, Massachusetts-based Genuity, which acquired a 93% stake in Paris, France-based Integra for $125m last October, said it had decided not to continue funding the business despite being on course to meeting its financial targets.

The move follows an earlier decision by Genuity in May to pull out of the professional services market in France, Italy and Spain, when it also began weighing up the viability of its other European operations in Denmark, Germany, Italy, the Netherlands, Sweden and the UK. At the time, Genuity also began a company-wide restructuring, involving the loss of between 1,100 and 1,200 jobs, or between 27% and 29% of its workforce.

Meanwhile, Genuity paid $50m to be granted an additional 30-day reprieve against paying back $2bn worth of debt with its banks and $1.15bn worth of debt to major shareholder Verizon Communications. The extension follows a two-week standstill agreement Genuity signed with its banks in July.

Genuity defaulted on its credit repayments in July after New York-based Verizon unexpectedly decided not to acquire a majority stake in the business.The decision by Verizon means it will avoid having to spend a further $850m on funding Genuity. This has left the company with no option but to approach its other investors, and so far it has raised $723m of the $850m total from eight banks including Chase Manhattan, Citibank and Credit Suisse First Boston, bringing its cash balance to $1.3bn. One of the major investors Deutsche Bank decided not to reinvest, and Genuity is now taking legal action to get the money.

Genuity's future now looks decidedly bleak since the current depressed state of the telecom and hosting markets makes a sale unlikely. The company claims that it has enough working capital to continue trading, but with a debt mountain of about $3.84bn, it will be seeking another reprieve from its creditors in 30 days, or bankruptcy could be looming.

© ComputerWire

Beginner's guide to SSL certificates

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
Symantec backs out of Backup Exec: Plans to can appliance in Jan
Will still provide support to existing customers
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.