Energis UK rescued by banking consortium

UK arm goes for £150m...

Struggling business telco Energis has been rescued by a consortium of its lending banks, which have bought the ailing firm with a cash injection of £150m. No official value was put on Energis, but the banking consortium - called Chelys - will receive 88 per cent of the continuing business for its £150m. As widely speculated at the weekend, Tory MP and former Asda supremo Archie Norman will chair the revitalised telco. Energis said the deal has secured the ongoing viability of the UK business and ensured it will be able to continue to provide for all its customers. In a statement to the London Stock Exchange made at 10:29 (BST) this morning it said: "Energis Holdings Limited (EHL), the holding company of Energis' UK operations, has been acquired by Chelys, a company majority owned by a consortium of financial institutions. Chelys has procured the injection of £150m of cash and new equity together with long-term debt facilities for the acquired business. "Chelys will be chaired by Archie Norman and will trade under the Energis name." About half of 16 banks to which Energis already owes money are thought to be involved in the acquisition. Chelys declined to comment on whether the management team will be taken from the existing Energis structure or from the purchasing banks. The acquisition statement also pointedly declined to mention whether the banks had agreed to write-off any of Energis' debt mountain. The deal will see Chelys buy only Energis' UK operations. The remainder of the company - in which share trading was suspended this morning - will be de-listed from the stock market and wound up. However, existing creditors and shareholders of Energis may receive some compensation - but only if the company does particularly well. If it is sold or floats in the next seven years with a value of more than £1.8bn, shareholders will get some money back. If the value is below £1.8bn, existing creditors will get nothing. A spokesman for the new company said: "The value of what investors receive depends on the growth and success of the UK business."