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Funders for H2O Networks face Serious Fraud Office investigation
Tuesday 15 February 2011 12:19:33 by John Hunt

A new twist has been found in the changes that have occurred at Fibrecity and H2O Networks, with the companies being sold off by the i3 Group early this year. Total Asset Finance, the principal funder of H2O networks who had been working to deploy fibre networks through the sewer systems in the UK, have gone out of business owing £133 million to the Belgian bank KBC from whom it obtained loans. More than £91m of funding from Total Asset Finance had been used by i3 Group who owned H2O networks along with Fibrecity Holdings.

Toward the end of last year, H2O/Fibrecity announced a delay to fibre roll-outs citing a company restructuring which coincided with the freezing of assets belonging to Total Asset Finance. The Serious Fraud Office got involved and in November secured books and records for Total Asset Finance, which is now in administration. Administrators say they will be looking closely to see if there had been any misconduct by the company or its directors.

The i3 Group sold the UK subsidiaries to a new company City Fibre Holdings in January which is headed up by former President and COO of the i3 Group. Administrators said they were in discussions with City Fibre Holdings over money owed to Total Asset Finance by H2O Networks, but City Fibre Holdings confirm they are not part of the investigation.

"City Fibre Holdings and its management team are not the subject of any investigation. The company is focussed entirely on reorganising the companies and the financial structures that it has inherited. This critical restructuring of these newly purchased businesses will ensure that they can continue to be leaders in fibre-based next generation access networks."

Greg Mesch (Chief Executive) City Fibre Holdings

City Fibre Holdings have previously stated that they intend to continue the roll-outs in Bournemouth and Dundee that H2O Networks had started. Whether this will still be possible without the previous funding for the company and with money owed to Total Asset Finance is going to be interesting to see.

Comments

Posted by whatever2 over 6 years ago
Intentions are all well and good. They mean nothing though.

h20 always stunk from day one. Pity none of the media actually bothered to look beyond the PR and see if it matched the reality. But then, it's only been what, 5 or so years the project has been in waiting?
Posted by herdwick over 6 years ago
Total Asset Finance appears not to be a Ltd Company in England or Wales ?
Posted by undecidedadrian over 6 years ago
Wow I'm surprised that the Royal Bank Of Scotland wasn't involed.

Or was it so dodgy that even they decided not to make a loan to them.
Posted by doowles over 6 years ago
Sound like a bunch of scammers to me
Posted by russianmonkey over 6 years ago
Or it could be they started with the best of intentions then realised that they couldn't fulfill it and had to defraud the bank to get more cash
Posted by krazykizza over 6 years ago
Avoid this company.
Posted by c_j_ over 6 years ago
Well, after all I've said about this lot, they still manage to pull an unexpected stunt.

Anyway, the moral of the story is, as usual, if it looks too good to be true (and lots of people have said that about H2O), it probably is too good to be true.

Sympathies to those who have been left out of pocket, those who have lost their jobs, and those whose streets are in need of repair.
Posted by AndrueC over 6 years ago
Well..that's one way to improve the RoI on NGA. With government grants starting to flow it should get even easier knowing badly those are usually policed :)
Posted by ihaveadream over 6 years ago
wow...its a mess but the concept is sound and the guys from CityFibre have rasied billins in other telecom companies. I will suppor them. this is just what this country needs a alternative to BT and Openreach. It will be tough but it sounds like they are willing to take a huge risk, stick there nexks out and make a go of it.....good luck guys!!!
Posted by c_j_ over 6 years ago
The Register reports that i3's rollout in Brisbane is now abandoned.

Sad.

Less hype, more delivery might have been a better tactic. But there'd have been less venture capital to burn, even if there'd been the prospect of more revenue.

http://www.theregister.co.uk/2011/02/22/no_sewer_fibre_for_brisbane/
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