Aberdeen fund to take $271 million hit after broadband provider Airband's collapse, source says
Aberdeen fund to take $271 million hit after broadband provider Airband's collapse, source says Aug 28 (Reuters) - British asset manager Aberdeen ABDN.L 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)