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Challenges Remain as UK ISP Origin Broadband Saved from Debt Pile

Thursday, December 20th, 2018 (3:24 pm) - Score 3,935
Origin Broadband Logo 2016

Credible sources have today informed ISPreview.co.uk that creditors have officially voted to rescue the Doncaster-based budget ISP Origin Broadband from its financial problems, which has already resulted in job losses and more may follow. But delivering on the recovery plan could prove to be challenging.

Origin has spent the past couple of years going through somewhat of a multi-million pound growth spurt and like so many others they did this by trying to attract customers via rock bottom prices, which always carries some risk (i.e. margins in the consumer broadband business are very low, but you still need a reasonable return to deliver good service and support).

Arguably one of the first official signs that Origin was struggling came in October 2018, when they unceremoniously gave a sizeable number of customers just 30 days’ notice to change ISP before being disconnected due to a “network restructure outside of our control” (here).

Not long after this we began receiving reports from staff members concerned about job losses (here) and the ISP’s PR department also went silent (some or all of them were made redundant). The reason soon became clear when, at the start of December 2018, it emerged that Origin’s Directors were in the process of trying to reach a Company Voluntary Arrangement (here).

The CVA is essentially an insolvency procedure, which allows a company with debt problems or that is insolvent to reach a voluntary agreement with its business creditors (i.e. paying them back over a fixed period). Assuming the creditors agree to such a proposal (i.e. it must be approved by creditors who are owed at least 75% of the debt) then the ISP would continue to trade.

Origin’s CVA revealed that the their “legacy systems and processes had been inadequate to deal with growth” and this had also resulted in “substantial bad debts.” Overall the ISP ended up with around £5m in “total unsecured creditors” and one of their biggest liabilities came from the £3.68m attached to Openreach (BT) for the provision of line rental and exchange services.

The company’s latest small accounts to the end of March 2018, which have just been published, offer some indication of the problem (these figures are older than those in the recent CVA).

origin broadband balance sheet 2018

In order to resolve this situation Origin’s CVA proposed make monthly contributions of £55,835 for a period of 36 months (starting January 2019), which comes to a total of £2,010,060 and their accountants could yet decide to increase those contributions for the final 3 months, if necessary.

On top of that Origin also proposed to cut their staff count by approximately 42% (hence the previous news), raise further investment of £2m and would even try to grow their base of residential subscribers. The latter is a difficult proposition in the current climate and with fewer staff to support it.

The proposal was put to a vote today and some of those involved have now confirmed to us that the deal was approved. Origin’s biggest debtor was understood to have already agreed to the terms, which meant that in many ways today’s vote was perhaps a forgone conclusion.

Unfortunately none of this seems likely to help those who are about to lose their jobs, many of which fear they will not get any redundancy pay and are furious at how the company management has handled the situation. Sadly such people tend to be at the bottom of the pile in these situations. Suffice to say that Origin once again finds itself facing a difficult road to recovery.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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23 Responses
  1. Avatar walkerx

    After the issues they caused with customers when leaving digital region, its a wonder anyone trusted them anymore.
    Cutting their staff isn’t going to help either, unless they losing more customers as all that will happen is that they won’t be able to provide adequate support and would definitely lose more customers.
    Overall they don’t look to be in a winning situation and probably more beneficial for them to close up now instead getting into further debt and owing more people money.

  2. Avatar Matt Wilkinson

    On to bigger and better things! Well done Origin for being the best and doing right by your customer and people. You did what you needed to do and the future is bright!Excited for the future.

    • Avatar Alex Bell

      What bigger and better things? Their network has very limited capability and is built with inferior products. They are not the best, they are not even the best of the worst. This company has no future with the current CEO. How can you say ‘doing right by your people’ when the current batch of redundant staff have not being paid their December salaries and have been listed as creditors in the CVA, their Christmases have been ruined. ‘You did what you needed to do’? what’s that? running up millions of debt whilst sneering at suppliers? The future is not bright for them at all, far from it 2019 will be one HELL of a year for them.

    • Avatar CarlT

      Astroturfing or parody?

    • Avatar Alex Bell

      Blatant astroturfing

    • Avatar Anon.

      Ha, knowing Matt personally I can categorically state someones just using his name, as he’s an ex employee the company has a huge problem with.

  3. Avatar Bruce Brunyee

    As one of the redundant I’m disgusted with how I and the rest of us have been treated. When we were placed on garden leave we were assured we would be paid in full. Stacey Hughes the HR manager promised that Origin were going to do right by the staff they were having to let go. That we would be paid up on the 14th of December and that they would honour the notice period pay.

    This as we now all know did not happen. The following day we all received our notification of being creditors, they refused to talk to any of us, and a security guard is now on the door not allowing anyone entry.

    Pay day came and went. I, like the rest of the redundant didn’t get paid as promised. I’ve had to put a freeze on my regular bills as I have no money to pay them. I’ve made a claim for JSA which will get me a massive £62 for that on the 31st. Not quite sure how my family and I am supposed to eat.

    Anyone can feel free to contact me for any further information.

  4. Avatar Manny

    See this as more of a stay of execution, their reputation was in pieces already and as someone else has said nothing will change with the current CEO in place and his cronies.

    More redundancies to come i fear for the staff, so sympathy for the people at the top

  5. Avatar Bah Humbug

    The business will only suffer more with the same directors in place. All have been using the business as a cash cow for their extravagances whilst the frontline staff are forced to lie to customers and suppliers.
    A real shame, as the business did look promising once-upon-a-time, but fairytales don’t always have a happy ending.
    My heart goes out to all those staff made redundant with no compensation. A Christmas they will not forget, for all the wrong reasons.

    • Avatar Alex Bell

      Whilst I agree that the business will continue to suffer with the some of the same directors in place (unless the CEO is removed or neutralised) there are people problems at the front and centre of their operation.

      Certainly, the systems used are at fault and are a big factor in their demise. Perhaps allowing amateurs to make their own software was a big mistake. Potentially the investors will look closely at this.

  6. Avatar David A Knight

    Been trying to get my ADSL connection fixed for 3 months now.
    They haven’t got a clue! keep getting me to change router settings and replaced the router now its time for an openreach visit.
    However I think openreach have refused to allow them to book fault calls as no-one calls me back with an appointment! despite promises!
    Shocking customer service! I was with an ISP rated as poor for customer service previously but nothing compares to the horrendous service I get from these guys.
    If something doesn’t change soon I won’t be renewing my services with them in June 2019

  7. Avatar Anon.

    They’ll only start to do well when they stop their culture of the elites all socialising whilst making the lowest feel like dirt and when they learn that bullying staff with mental health problems out of the workplace isn’t the way to go. (I can immediately think of FIVE ex-employees this happened to)

    They’ve kept the wrong management in place, allowing the incompetent middle management to all keep their jobs (albeit with a demotion) and sacking the staff that worked their a***s off for the company.

    One of the posters above who’s been binned with no Xmas pay had a HEART ATTACK whilst at work there and STILL was trying to help his customer, even when the EMT’s were working on him!

    Unsurprisingly all of OB’s family still kept their jobs.

    I can remember back in Jan when they sacked 10% of their staff, Oliver and Henri (the founders) took a lovely trip to Blizzcon in the US whilst Rich (head of Residential) bought himself a £65k car. How these absolute scumbags are allowed anything to do with business anymore is beyond me.

    But hey, as long as all of the scum can afford their mortgages whilst people with kids to feed can’t even afford Xmas it’s cool eh? I predict a mighty beatdown for any of them unlucky enough to be seen in public.

  8. Avatar JasonB

    I really do feel for the front-line staff. I am surprised the company has managed to keep going for this long with it’s current management in place. Several years ago a company I worked for provided services to Origin and it was like pulling teeth trying to get payment out of them with constant excuses they were struggling financially. I visited the offices several times and at the time Oliver recently had a big glass wall partition installed with the company logo etched in to it. He lauded over it and made it a centre piece of conversation boasting the ridiculous amount that it cost, knowing full well I’ve been struggling to receive payment for services from the company.

    It is no surprise that I say Oliver and his brother did not make it on their own. Their parents set them up and come from a financially comfortable background of lawyers. I feel Origin will get wound up soon and the Bryssau brothers will move on to run their next company in the same fashion.

  9. Avatar M

    Lol Pete, work? Remember when you came onto me in the office and I knocked you back? I’ve still got the texts lol. When parody is life. See you soon splodge

  10. Avatar How can they get away with this?

    Origin are now advertising for new Customer Service staff. WTF?!

  11. Avatar Anon Customer

    Down again, saw a comment on twitter that they will NOT be writing a public report on what caused the outage (https://twitter.com/originbroadband/status/1080817811147112448?s=21). What are they hiding? Unapaid supplier? Rouge staff?

  12. Avatar Concerned

    To all customer service staff made redundant, they are now hiring again for the same role. This is proof of unfair dismissal and you should seek legal advice on how to claim for compensation, this is proof that they just wanted to get rid of certain staff and claim it was down to redundant positions.

  13. Avatar Upset ex Staff

    Cant believe after being made redundant before Christmas and not getting paid my old job is readvertised under a new job title.

    Laughable though its a 6 month probabtion when everyone knows the company will not survive 6 months.

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