A tight spot

15 April 2009 By Rachel Sanderson

The auditors for the debtmired Italian broadband provider won t sign off the 2008 accounts. Ernst & Young doubts whether this is a going concern. The lenders are lukewarm about refinancing, so Tiscali may have to turn to spurned suitors BSkyB and Carphone Warehouse.

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Tiscali SpA said on April 15 its auditor Ernst & Young gave a qualified opinion on the broadband operator's 2008 accounts, citing uncertainty whether the company is a going concern.

Tiscali said it contested the auditor's opinion and added that its board will propose at a general meeting on April 30 that shareholders use reserves to cancel part of the company's 2008 losses. Its creditor banks were ready to extend a standstill agreement on the payment of interest to December 31, Tiscali added.

The Italian operator has already suspended interest payments on its E500m of longterm debt out of a total of E601m. Intesa Sanpaolo and JP Morgan Chase are the major lenders.

The Sardiniabased company has sparked investor worries over its financial viability after failing to sell its UK assets.

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