Concern is growing over the immediate future of Anglo-Italian broadband provider Tiscali after the board halted negotiations on the sale of its UK assets to BSkyB last week, saying it was "defacto impossible to proceed".
Tiscali's shares were suspended Monday after a massive one-day fall, and it has now emerged that the group has suspended payments to its banks, including Banca Intesa Sanpaolo and JP Morgan. It is around £460m in debt and a deal to sell the UK business would have relieved a significant proportion of that figure.
"The Company further clarifies that it has started a process aimed at the renegÂotiation of the financial debt with key lenders, who have shown to be supportive with this approach," Tiscali said in a statement.
Tiscali did not provide any additional comment in relation to the crisis, but claimed it would continue to operate "as normal" with both customers and partners.
The collapse of talks with Rupert Murdoch's BSkyB outfit last week marked the sorry end of Tiscali's long and tortuous attempts to sell up. The for sale sign went up in May and over the summer The Carphone Warehouse and Vodafone both turned their noses up at the deal.
BSkyB emerged onto the scene in November 2008 seeking to boost its own Sky Broadband business, with the tabled deal said to be worth around £450m. However concerns were raised over the future of Tiscali's business-facing partners as the buyers were predominantly media providers with little experience of the channel.