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Financial Concerns for UK ISP Origin Broadband After CVA Proposal

Thursday, December 6th, 2018 (9:24 am) - Score 2,358
Origin Broadband Logo 2016

The Directors of Doncaster-based budget ISP Origin Broadband, which last week hit the headlines due to staff redundancies (here), are now in the process of trying to reach a Company Voluntary Arrangement (CVA) with its creditors. Documents seen by ISPreview reveal that Origin has around £5m in “total unsecured creditors“.

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 will continue trading.

According to the documentation, Origin have appointed “business recovery professionalsChamberlain & Co (chartered accountants) to act on their behalf in this matter and to draw up the necessary proposal (hence creditors now being notified of the CVA proposal). A vote and decision to approve or reject the CVA is due to be taken on 20th December 2018.

Prior to its growth spurt Origin is said to have had 4,000 residential customers in November 2016, which more recently peaked at 36,000, although apparently their “legacy systems and processes had been inadequate to deal with growth,” which is said to have resulted in “substantial bad debts” of £884K in the period ended 31st March 2018 (a full year loss of £7m is listed for this period), with a further £883K in the year to date.

The company has also ended up with some historic liabilities. For example, the biggest liability reflects £3.68 million attached to Openreach (BT) for the provision of line rental and exchange services. The company is said to have made some “force majeure” or essential payments to a number of key suppliers in order to ensure the continuation of business up to the date of the CVA meeting.

Elsewhere Origin’s unsecured creditors list also includes HMRC, Affiliate Window (legal claim), landlords (rent / loans), employees, trade creditors and so forth. In response the CVA proposes that, among other things, Origin should make monthly contributions of £55,835 for a period of 36 months (starting January 2019), which comes to a total of £2,010,060 but the accountants could yet decide to increase those contributions for the final 3 months.

On top of that Origin is also proposing to cut their staff count by approximately 42% (hence last week’s news), raise further investment of £2m (apparently a deal could come next month) and will try to grow their base of residential subscribers (a difficult proposition in the current climate and with fewer staff to support it).

In theory Origin could still pull itself out of the mud. Nevertheless the situation will no doubt cause concern for both customers of the service and all those staff in the redundancy pile, particularly as it comes just a few weeks before Christmas (one of the most expensive times of the year).

Should the CVA be rejected by either shareholders or creditors, Origin will need to consider alternative insolvency options. Sometimes creditors feel that better returns would be achieved using a different option, or assume that compulsory liquidation is the preferable route, although this is generally not the case in practice.

Over the past couple of weeks we have repeatedly tried to reach Origin for a comment or clarification but the response continues to be one of silence.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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16 Responses
  1. SpencerUk

    I feel for the staff that’s at Origin. Such news so close to festive period isn’t gonna be good.. Having said that, anyone with half a brain cell would have concluded they were in financial trouble.
    Since the collapse of Digital Region they haven’t really recovered. Their reputation was in tatters when they cut everyone off and assured everyone service would continue. Still chuckles me now that..

  2. Claire

    Also feel for the staff on the shopfloor, been a lot of mismanagement here. Having seen the figures owed and to who its frightening. Wouldnt surprise me if there is an investigation into the running of this company.

  3. Best to not say

    The staff where told that they would definitely recive there pay by Oliver himself the head of the company if they where made redundant and not to worry . Only to then be told second hand by staff that are still there they have no intention of paying them and leaving many with no money for Christmas or bills they have lied to peoples faces and ruined many life’s they don’t deserve to carry on as a business

    • Also best not to say

      the same Oliver by chance who said its ok to resinstate customers direct debits without their knowledge as they owe him money!

  4. Watch This Space .......

    As an employee being made redundant I am hoping that they will keep to their word and pay wages as promised on the 14th of December. The documents do not make it clear if they will or won’t. I have secondhand information from an employee that has not been let go that they are not going to pay. We will just have to wait and see.

  5. Ollie B (The B stands for Bankrupt)

    People on maternity leave have been left to learn they are redundant from other employees, without any formal notice. The CVA proposal reports, among other horrendous amounts of debt, over £100,000 that is owed to employees through backlogged pay, holiday entitlement and redundancy pay. While all this is happening, not a single member of the ‘Family and friends club’ has been let go; with some of them in completely defunct roles in Origin’s current climate. We all know about dodgy Ollie, but Pistol Pete (the so-called ‘Head of product’) is by far the most shameless of the lot. He does no tangible work and coasts by in his cushty position because of his tenure, all the while thinking he is god’s gift. The entire B2B wing is shutting down (watch out business customers), marketing has gone, the contact centre has been halved and yet they still pay ridiculous wages to back office execs (Oliver and Pete mostly). My advice to Origin employees, especially for folks in the contact centre, is to strike. As much as they don’t want you to know it, they are completely dependant on your work to prop up their stupidity. While I’ve said a lot of bad things about higher-ups, there are a few that are genuinely working for change; namely Rich Lilley, Stacey Hughes, Amy Jones, Henri Wust and Chris Sutton. I hope you guys get to move on to bigger and better things.

    • Meme

      Yes and Pete’s Instagram account isn’t locked down, so it’s full of evidence of him having a whale of a time while employees and customers suffer.

  6. Another meme

    Want to hear something funny? Within 20 minutes of posting Pete Instagram is not locked down, he makes it private! Got things to hide Pete?

  7. Shame

    One of the worst was this horrible excuse for a complaints person called Hollie. She was reported for bullying colleagues and having loud tantrums in the office. She used to lie about doing work and even bragged about being an escort and being on porn sites. I hated working around her. She was vile.

    Everyone thought she was a compulsive liar and a joke in general tbh and her incompetence must have cost the company a fortune. Perfect example of a cancerous individual who should never have been taken on.

  8. Hard work and dedication count for sh*t

    How a company can legitimately not pay employees for work they have done whilst continuing to pay ridiculous salaries for some of those still employed to do very little is completely beyond me!

    I hope every single broadband customer moves elsewhere as soon as possible!

  9. Ex Staff

    As a now ex member of staff who used to work in the debt recovery and billing team I can now let everybody know that origin don’t have a correct chase process when customers just up and leave so if every customer went elsewhere they may send you a couple of emails asking for money but they can’t enforce it so you would be let off with the cease bill

  10. Ex Staff

    As an Ex employee for Shorigin fraudband, I can plainly say that it is the worse company to work for, don’t get me wrong the management we’re amazing but their processes we’re absolute dog shit, Oliver doesn’t know how to run a business, don’t know his arse from his elbow. How about concentrating on NOT spending your money on stupid shit, oh whilst you’re at it, getting selling your Range Rovers, and your fancy big house to put some money back into your corrupt business, I absolutely hated the place but my team kept me afloat. I hated lying to customers about their refunds and telling them it’ll take 30 days… Hope you have a good Christmas Bryssau try not to choke on ya sprouts.

  11. 5G Infinity

    Looking at the history, accounts etc it hasn’t been viable since early 2016. So whether its the management or inability to get sufficient customers onboarded I am not sure – but above messages highlight some of the internal challenges.

  12. Legally I can’t say

    Basically agreeing with everything previously said. While telling us we’re not going to be getting paid Oliver is bragging about all the money he has and how much he’s spending on Christmas. Why not spend it on staff wages you promised? Used to think he was a good guy just wanting to help but he’s just another money hungry corporate wanna be. See you in job centre when you go bust 🙂

  13. You can’t write this stuff

    A security company has now been taken on to prevent access into the building – they could have just paid us what we’re owed then they wouldn’t have to be worried about angry mobs trying to talk to HR and management…

    • Joe b

      He doesn’t like paying, I have done work for him personally at his home address. Owes me a lot of money and has not paid 5 months later

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