Banks take over Energis with Norman at helm

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The Independent Online

Energis is to be rescued by its banks in a move which will see shares in the troubled telecoms company de-listed from the London market and Archie Norman, the former chairman of the supermarket chain Asda, installed as chairman.

Details of the rescue deal, being put together by the company's 16-strong bank group, could be announced as early as this week, bringing to an end attempts by venture capital houses to grab the UK business.

Mr Norman, the Conservative MP who had headed a bid for Energis by the venture capital firm Permira, will appoint a new management team once the deal has been formally agreed.

It is unclear whether Energis' current chief executive, David Wickham, and finance director Bill Trent will remain in their positions.

"He [Mr Norman] has made it clear for some time that he wants to come back and do something in business and given his involvement with Permira, I think it's a natural thing that he was considered," one banking source said.

Energis' banks, which are owed some £690m, are understood to be preparing to inject an extra £150m of cash into the business while also carrying out a debt restructuring that will see them and bondholders seize control at the expense of shareholders.

Such a deal would also see shares in Energis de-listed from the London Stock Exchange and the company taken private although it is likely to be re-floated in the future.

The move follows months of negotiations with various venture capital firms which had culminated in a final bid from a consortium comprising Apax Partners, Carlyle Group and Credit Suisse First Boston.

The banks are said to have dismissed the latest offer put forward by the consortium as "opportunistic" since its proposal would have forced them to write off up to £300m of their loans.

The consortium had planned to leave Energis with about £400m of debt and, like the banks, was looking to inject some £150m worth of cash into the business.

It is thought to have put forward an improved offer that paved the way for bankers to get more upside if the business met certain performance targets in the future.

Shares in Energis collapsed earlier this year after it admitted it would breach the banking covenants attached to newly-negotiated loans. It has since been holding talks with banks, bondholders and potential investors with a view to recapitalising the business or selling it.

The company pulled the plug on both its German and Swiss operations to conserve cash after buyers for either of those businesses failed to emerge.