Feeds

Genuity pulls plug on European Web Hosting arm

Situations vacant

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

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

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
NSA SOURCE CODE LEAK: Information slurp tools to appear online
Now you can run your own intelligence agency
Azure TITSUP caused by INFINITE LOOP
Fat fingered geo-block kept Aussies in the dark
NASA launches new climate model at SC14
75 days of supercomputing later ...
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Cloud unicorns are extinct so DiData cloud mess was YOUR fault
Applications need to be built to handle TITSUP incidents
BOFH: WHERE did this 'fax-enabled' printer UPGRADE come from?
Don't worry about that cable, it's part of the config
Stop the IoT revolution! We need to figure out packet sizes first
Researchers test 802.15.4 and find we know nuh-think! about large scale sensor network ops
SanDisk vows: We'll have a 16TB SSD WHOPPER by 2016
Flash WORM has a serious use for archived photos and videos
Astro-boffins start opening universe simulation data
Got a supercomputer? Want to simulate a universe? Here you go
prev story

Whitepapers

Designing and building an open ITOA architecture
Learn about a new IT data taxonomy defined by the four data sources of IT visibility: wire, machine, agent, and synthetic data sets.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
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?
Protecting against web application threats using SSL
SSL encryption can protect server‐to‐server communications, client devices, cloud resources, and other endpoints in order to help prevent the risk of data loss and losing customer trust.