Troubled broadband provider H20 Networks has undergone a pre-pack administration, as part of its new owner's restructuring strategy.
H20 Networks ran into financial difficulties following the collapse earlier this year of Total Asset Finance, a major funding provider for its superfast broadband rollouts in Bournemouth and Dundee.
The firm was subsequently sold off by fibre network specialist i3 Group, along with 13 of its UK subsidiaries, to CityFibre Holdings (CFB) in January.
In a statement released at the time, CFB said its priority was to "reorganise the companies and financial structures it has inherited".
CFB completed this process last month, resulting in H20 Networks being placed into administration, and then repurchased the firm.
H20 Networks' last filed accounts with Companies House revealed the company had a turnover of £976,537, but made a loss of £3.3m in 2010. This is down from £3.8m in 2009.
Speaking to ChannelWeb, CFB director and former i3 Group president Greg Mesch said the H20 Networks pre-pack deal was a necessary part of the overall restructuring process.
He also revealed that the number of employees working across i3 Group's companies has decreased from 176 to 30 since the buyout was completed, but no further job losses are planned.
"One of the best places in the market to be at the moment is fibre networks and these companies had great physical assets but bad business models, and ran into problems," explained Mesch.
He said CFB's priority is to restart the broadband rollouts that had been halted by H20 Networks' difficulties.
"When the financing stopped, work had to be halted on those projects and we are now in a position where they can begin again," he said. "We can also start to grow the company."
In a further statement, the company revealed that it has a memorandum of understanding in place to connect more than a million homes across an unspecified number of towns and cities to its fibre networks.
It said: "We will develop a consortium with service providers, equipment vendors, financial institutions and city councils to build the next-generation infrastructure this country so desperately needs."
Eddie Pacey, managing director of EP Credit Management and Consultancy, said pre-pack agreements are a popular tactic for firms wanting to distance themselves from past issues.
"In my experience, this is a tactic used to distance either businesses or people from what can loosely be describe as a 'hot potato'," said Pacey.
"Judging by earlier reports about the funding of H20 Networks by Total Asset Finance and the investigation into its collapse by the Serious Fraud Office, the issue is clouded," he added.
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