Dutch telecoms firm KPN is set to submit a formal offer of €20 million for most of the assets of failed datacommunications carrier KPNQwest, a source close to KPNQwest's banks said yesterday. The bid is less than one-tenth of what the banks hoped to recoup and comes after all other bidders for the "KQ Network" dropped out.
KPN, formerly a strategic partner for Eircom, would get a network that is crucial to providing service to its customers, such as large corporations and internet service providers, but the deal would raise more questions about the Dutch company's relationship with its failed affiliate.
The KQ Network consists of the fibre-optic network rings in Britain, the Netherlands, Germany and France, as well as a transatlantic fibre link and a network operations centre.
KPNQwest was declared bankrupt in May after it said it would run out of money in June. Its major shareholders, KPN and Qwest Communications, resigned from its board and banks turned down a request for more funding.
The company accumulated €2.2 billion of debt by expanding its network at the height of the telecoms bubble and has lost €42 billion of shareholder value in the last two years.
The banks, which want an inquiry into KPNQwest accounts, are bitterly disappointed that a network that cost billions to build would be reduced to a €20 million firesale.
KPNQwest's trustee, Mr Jan Van Apeldoorn, said a low price was not surprising given the low demand for telecoms capacity and the firm's complicated network, spread over many European countries each with its own trustees.
Of the $20 million, €4 million would go to the French trustees for the part of the network in France.
Last week, Dutch venture capital firm Trimoteur said its €200 million bid for the entire KPNQwest network, including Ebone, had been rejected by the banks and the trustees. - (Reuters)
