UK ISP AB Internet Sells Wireless Broadband Network and Reveals Debt Pile

The administrators for Lincolnshire-based fixed wireless broadband ISP AB Internet, which in late May 2017 shocked customers by announcing that the company had gone into administration and was looking to sell itself as a “going concern” (here), have revealed details of the ISP’s debt pile and sale.

The problems first became clear after customers began to lose connectivity during early May, which was followed by news that their suppliers were threatening to permanently pull the plug unless the ISP paid its bills. In response Martin C Armstrong and James E Patchett, of Turpin Barker Armstrong, were appointed as Joint Administrators on 27th May 2017.

The appointment enabled Turpin to stop suppliers from disconnecting the service because such an act would have had a “catastrophic effect” on customers and may have “dissipated any value of the Company’s Goodwill.” Under this approach the company could continue trading until a sale was agreed.

New documents released by the administrator reveal that BT was the first supplier to initially disconnect AB Internet from its supply in the Black Isles (Scotland) area, although TalkTalk and KCOM were threatening to do exactly the same. In relation to that, unpaid liabilities for utilities, backhaul supply, staff/contractors and rent currently comes to around £42,500 +vat, while the company’s trading loss is expected to be about £80,000.

On top of that it’s worth reminding that rival wireless ISP Quickline announced in March 2017 that they had acquired part of AB Internet’s “network and customer base in Newark, Boston and Peterborough” for an undisclosed sum (here), which is referenced as the “Lincolnshire network” in the document.

Apparently AB Internet raised invoices in May and June totally £59.3K but £51.8K of that remains outstanding (this “includes invoices relating to supply to the Lincoln purchaser and a further payment due under the GPA contract“), which is being pursued (GPA = Gigaplus Argyll Project, which at the time seemed a bit too big for AB Internet to tackle). It’s worth noting that Quickline itself was just gobbled by Satellite broadband provider SSW (here) and hopefully that won’t complicate matters.

However Turpin expects to recover the outstanding payments and touts “increased realisations in respect of Goodwill of £130,000 [and] tangible network assets,” which they feel has not harmed their attempts to resolve the company’s challenges. Indeed the good news is that “sales have been agreed with 2 unconnected third parties,” although this is still subject to a final contract being agreed.

The above sale includes AB Internet’s Forest Holidays network for around £65,000, plus the sale of their remaining 4 networks and other assets for £200,000. Sadly AB Internet’s Director, Neil Tucker, told ISPreview.co.uk this morning that he could not comment, although we are expecting an announcement in the near future.

One odd point in the document is that AB Internet appears to own a Tesla electric car (“financed vehicle … which [isn’t] likely to have any equity“). A source informed us that this 2014 model car was purchased about a year ago when the company wasn’t quite at deaths door and we believe that the model in question cost around £60K. An expensive purchase for an ISP of AB Internet’s size and we’re surprised they didn’t sell it much sooner to tackle their debts.

Elsewhere we’ve received some sporadic reports from customers in Monmouthshire (Wales) who over the past week have lost connection and cannot get back online due to an understandable lack of customer support. Hopefully the news of a sale should at least bring a resolution to those woes, although for now the details remain unclear.

For anybody interested I’ve pasted a copy of Turpin’s events summary below, which is well worth a read.