Sandoz family buys KPNQuest assets

The bankrupt Dutch telecoms company KPNQwest yesterday sold the main assets of its Ebone fibreoptic network to Interoute, a private UK business controlled by the Sandoz family.

While no financial details of the deal were revealed, it is thought London-based Interoute is shelling out about €15m (£10m) for the Ebone net- work assets.

Under the terms of the deal, Interoute will gain full control of fibreoptic networks in eight European cities including Paris, Frankfurt, Madrid, Zurich, London, Vienna, Milan and Amsterdam.

"Acquiring Ebone's assets not only provides us with an opportunity to accelerate our strategy of deepening our network presence and connectivity in key European cities, but also enhances our ability to provide value-added network services and solutions," said James Kinsella, the company's executive chairman.

Interoute, which was founded in 1995, also said it had bought Ebone telecoms' infrastructure connecting Munich to Vienna, Turin to Milan, and Frankfurt to Strasbourg. "It also allows us to continue to support customers still using the Ebone network infrastructure," Mr Kinsella said.

Interoute operates one of Europe's largest fibreoptic networks, connecting 45 cities in nine countries. The company is owned by a number of shareholders of which the largestis the Sandoz family, whose Sandoz pharmaceuticals company merged with Ciba to form Novartis.

KPNQwest, which filed for bankruptcy at the end of May, was forced to shut its Ebone network down at the beginning of this month after administrators failed to find a buyer.

It is thought Sweden's Telia will bid for the remains of the company's network after its trustees turned down a bid from KPN, one of KPNQwest's founders, which held a 40 per cent stake.

Last week Telia, which is said to be holding talks with the trustees, bought the assets of a French unit of KPNQwest in a move to strengthen its business in both France and Italy.

The purchase, Telia said, represented "a few per cent" of its annual investment budget and would give it a "significant" presence in "one of Europe's most telecom intensive regions".

In the wake of KPNQWest's collapse, its trustees had hoped to sell the bulk of the company's network in more or less one lot but potential bidders walked away. Worse still, they admitted last week that the company had suffered a much bigger loss in 2001 than the one it had indicated.