Funders for H2O Networks face Serious Fraud Office investigation
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.