Energis: ex-boss 'in rescue move'

FORMER Energis boss Mike Grabiner is being linked with a surprise return to the embattled telecoms group.

Grabiner, who unexpectedly quit as chief executive last year, recently announced that he would join Apax, a New York private equity group.

City sources see Apax as one of a number of venture capitalists that might be interestedin rescuing Energis, which last week lost most of its stock market value. It had warned creditors that it might fail to meet interest payments due on loans. Energis is valued at less than £52 million, compared with £12 billion at its peak under Grabiner.

News that Energis was likely to break its banking loan agreements came only weeks after it announced a new £725 million line of credit from a syndicate of banks.

Apart from entering talks with banks about restructuring debts, Energis axed 400 staff and put its operations in Germany up for sale. It has spent more than £1 billion building up its business there and only last year bought web-hosting company Ision.

One analyst said: 'Selling Germany is going to be very tough. We have already seen telecoms collapse in Europe and just because a fortune has been invested burying fibreoptics in the ground doesn't make it worth a fortune now.'

But venture capital groups may see value in Energis, which has sales of more than £1 billion, if its finances can be sorted out. A deal would require approval by bondholders, banks and utility group National Grid, which owns 35% of Energis.

'This might be the snip of the year,' said a source.