Aberdeen fund to take $271 million hit after broadband provider Airband’s collapse, source says

Aug 28 (Reuters) – British asset manager Aberdeen will take an about £200 million ($271.72 million) hit to one of its infrastructure funds following the collapse of UK broadband provider Airband, a source familiar with the matter said on Friday. 

“Following a disciplined review of future funding requirements and risk-adjusted return prospects, we made the difficult decision to cease further funding,” an Aberdeen spokesperson said.

Aberdeen declined to comment on the size of the write-off.

• Airband entered administration amid significant sectoral headwinds and subsequently sold its assets and customer base to UK-based broadband company Voneus.

• On Friday, Macquarie-backed Voneus said it completed the acquisition of Airband’s assets and customers, but did not disclose any financial terms.

• The deal was struck at a sum in the single-digit millions, according to a report by the Financial Times, which first reported the write-off on Friday.

• Airband’s lenders, including HSBC and Lloyds, will also take a hit from the sale of the broadband provider, the FT said citing people familiar with the matter.

• Lloyds and HSBC declined to comment.

• Airband’s collapse comes as many smaller broadband providers struggle to earn a return, after BT and dozens of so-called altnets poured billions of pounds into fibre networks over the past decade.

• “Airband has faced significant headwinds consistent with those affecting the wider UK fibre market, including higher build costs, slower customer growth, increased competition, and a challenging financing environment,” an Aberdeen spokesperson said.

• Aberdeen added that Airband was one investment within a diversified portfolio that had otherwise performed strongly and was still expected to deliver positive overall returns to fund investors.

($1 = 0.7361 pounds)

(Reporting by Iain Withers in London and Ankita Bora in Bengaluru; additional reporting by Krisha Bhatt; Editing by Jonathan Ananda)