One.Tel could be set for UK split
Published: 31 May 2001 16:44 BST
The UK operations of struggling telco One.Tel could be set to break away from its parent company in Australia.
Company sources have told ZDNet that Britain is the only country where One.Tel is making a profit -- thought to be in the region of £14m per year. Senior company officials told employees on Wednesday that the profits made in the UK meant it would be possible for the UK office to go independent. Currently, most of the UK profits were being used to support the loss-making Australian operations.
One.Tel refused to discuss whether a split was being considered. "We can't validate or speculate on these matters. We've nothing further to say at this stage, apart from that it is business as usual," said a spokesman.
The company is also refusing to answer questions from its own staff on the matter.
ZDNet reported on Wednesday that One.Tel had called in the administrators and suspended trading in its shares, because a planned rights issue of AU$132m (£48m) would not be enough to keep the company solvent. The company is refusing to discuss possible redundancies with union officials in Australia, explaining that such matters are in the hands of the administrator.
The Australian Securities and Investment Commission has now launched an investigation into One.Tel, following the referral of information from the Australian Stock Exchange and concerns raised by investors. One.Tel shareholders James Packer and Lachlan Murdoch are angry at being allegedly misled about One.Tel's cash position in the wake of the telco appointing administrators.
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