Aberdeen Suffers $271M Hit After Airband Broadband Provider Collapse
Aberdeen Faces Major Write-Off Following Airband Administration
Aug 28 (Reuters) - British asset manager Aberdeen will take an about £200 million ($271.72 million) hit to one of its infrastructure funds following the collapse of UK broadband provider Airband, a source familiar with the matter said on Friday.
Aberdeen's Response to Airband Collapse
"Following a disciplined review of future funding requirements and risk-adjusted return prospects, we made the difficult decision to cease further funding," an Aberdeen spokesperson said.
Aberdeen declined to comment on the size of the write-off.
Details of Airband's Administration and Asset Sale
Airband's Entry into Administration
• Airband entered administration amid significant sectoral headwinds and subsequently sold its assets and customer base to UK-based broadband company Voneus.
Acquisition by Voneus
• On Friday, Macquarie-backed Voneus said it completed the acquisition of Airband's assets and customers, but did not disclose any financial terms.
• The deal was struck at a sum in the single-digit millions, according to a report by the Financial Times, which first reported the write-off on Friday.
Impact on Lenders
• Airband's lenders, including HSBC and Lloyds, will also take a hit from the sale of the broadband provider, the FT said citing people familiar with the matter.
• Lloyds and HSBC declined to comment.
Broader Market Context and Future Outlook
Challenges Facing Smaller Broadband Providers
• Airband's collapse comes as many smaller broadband providers struggle to earn a return, after BT and dozens of so-called altnets poured billions of pounds into fibre networks over the past decade.
Aberdeen's Statement on Market Headwinds
• "Airband has faced significant headwinds consistent with those affecting the wider UK fibre market, including higher build costs, slower customer growth, increased competition, and a challenging financing environment," an Aberdeen spokesperson said.
Portfolio Performance and Investor Outlook
• Aberdeen added that Airband was one investment within a diversified portfolio that had otherwise performed strongly and was still expected to deliver positive overall returns to fund investors.
($1 = 0.7361 pounds)
(Reporting by Iain Withers in London and Ankita Bora in Bengaluru; additional reporting by Krisha Bhatt; Editing by Jonathan Ananda)
