Shares in Colt fall as chief says he is quitting

Paul Chisolm, the driving force behind Colt Telecom, the fast-growing business telecoms group, surprised the stock market yesterday by announcing his intention to step down as chief executive.

Paul Chisolm, the driving force behind Colt Telecom, the fast-growing business telecoms group, surprised the stock market yesterday by announcing his intention to step down as chief executive.

News of his impending departure, which was released together with second-quarter results, knocked shares in the group, which closed 191p lower at 1,965p.

Mr Chisholm, 52, has been credited with turning Colt from a promising concept backed by seed capital of $100m in 1992 into one of the sector's pace-setters, with operations in nine countries across Europe. He wants to return to the US next year.

He said: "As I consider returning to my home in Boston, I've asked the board to begin the search process now to ensure that we have ample time for a successor to be chosen and an orderly transition to be completed." He will remain on the company's board as a non-executive director after he returns to the US to spend more time with his family.

Mr Chisholm is one of the highest-paid executives based in Britain, but has largely shunned personal publicity. He will leave the loss-making company with about 6 million share options, which together with his basic salary, takes his pay while at Colt to more than £100m.

"There's a point at which I have to pay back my family time," Mr Chisholm said. "The only thing that I am worried about now is Colt continuing as a well-run operation. I am not the sort of person who worries about what they are going to spend their money on."

Colt said that it was looking at both internal and external candidates to replace Mr Chisholm, but no timetable had yet been set to pick a replacement.

Yesterday's results for the second quarter to June came in largely in line with analysts' expectations, with a 60 per cent rise in turnover to £151m, while pre-tax losses grew to £33.7m from £26.4m a year ago.

The company, which plans to return to the capital markets to raise about £450m in 2002, aims to turn a profit in 2003.

Losses have grown as it has built fibre optic networks within and between leading cities in Europe to exploit the explosive corporate demand for high-speed data and internet transmission.

"Colt showed the way in opening up telecoms markets in Europe," Mr Chisholm said. "I think that we've been a leader in that."

Colt - formerly City of London Telecom - was initially backed by Fidelity Capital, the venture capital arm of the giant fund manager. The group retains a controlling stake.