Sugar gets sweet on Ionica

Alan Sugar has been tipped as a potential buyer for Ionica, a fixed wireless telecoms company that crashed into administration leaving debts of #300 million.

The Tottenham Hotspur owner is believed to be the frontrunner of several investors in discussions with administrator PricewaterhouseCoopers, appointed when Ionica plunged into bankruptcy following an ultimately disastrous flotation on the Stock Exchange.

PricewaterhouseCoopers is ensuring Ionica continues to provide a service for existing customers, although it announced 600 of the 900 staff had been laid off.

Chris Hughes, partner at PricewaterhouseCoopers, said: 'We are conducting an urgent review of the business. Our intention is to have a period of stabilisation to ascertain whether it can be sold. In the meantime, we expect existing customer services will operate as normal.'

According to one prospective customer, the company was taking deposits for network installations from the public until the day before it made the announcement.

The company initially floated in July 1997 at 390p, which valued the company at nearly #660 million. This year its shares fell to 8.75p before rallying to 17.5p where the shares were suspended.

The final valuation was #30 million with debts of #300 million.

Adrian May, consultant at 3Com, said although fixed wireless is successful in mainland Europe and Scotland, its outlook is bleak.

'A lot of people have been burned and anyone that says they are building a wireless network will be laughed at. You won't be able to raise money for that now,' he said.