{"id":26146,"date":"2021-03-03T09:05:31","date_gmt":"2021-03-03T09:05:31","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=26146"},"modified":"2021-05-13T10:07:15","modified_gmt":"2021-05-13T09:07:15","slug":"fibre-engineering-firm-lite-access-updates-on-its-cityfibre-dispute","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/03\/fibre-engineering-firm-lite-access-updates-on-its-cityfibre-dispute.html","title":{"rendered":"Fibre Engineering Firm Lite Access Updates on its Cityfibre Dispute UPDATE"},"content":{"rendered":"

Lite Access<\/a>, which specialises in deploying UK fibre optic (e.g. FTTP<\/a>) broadband infrastructure, has officially appointed FRP Advisory Trading Limited as administrators and confirmed that they intend to “vigorously defend<\/em>” themselves against Cityfibre<\/a>’s position that they were in repudiatory breach of contract(s).<\/p>\n

Just to recap. Last year saw Lite Access scoop a string of recent contract wins, which for example saw them hoover up fibre optic rollout contracts for Cityfibre<\/a> in Cambridge<\/strong>, Lowestoft<\/strong> and Bury St Edmunds<\/strong>. The company has also worked with various other broadband and telecoms firms, such as Gigaclear<\/a> and Openreach<\/a>.<\/p>\n

However, toward the end of last year the civil engineering firm suddenly announced that they had “temporarily suspended UK operations<\/em>” due to the “ongoing COVID-19 pandemic, which continues to become worse, along with challenges related to its ongoing builds<\/em>.” The company later added that they had opted for a suspension in order to give time for a consultation with stakeholders to help “optimize both its current operations and existing contracts in a COVID-19 environment.<\/em>”<\/p>\n

The situation then appeared to be improving when, on 1st December 2020, the company announced the “partial<\/em>” resumption of UK operations, but it wasn’t to last. By mid-December Lite Access had issued another statement, which confirmed that they had “elected to file a notice of intent to appoint an administrator<\/em> … [in order to] create a moratorium over the Company for a period of 10 days to protect the assets of Lite Access UK<\/em>” (here<\/a>).<\/p>\n

At around the same time as this ISPreview.co.uk began hearing from various companies in Lowestoft, which contacted us to complain that Lite Access had suddenly exited the area and left them with unpaid bills worth many thousands of pounds. Cityfibre<\/a> followed this by confirming that they were no longer working with Lite Access in the three locations.<\/p>\n

A Cityfibre spokesperson said (Dec 2020):<\/strong><\/p>\n

“We can confirm that we are no longer working with Lite Access Technologies and construction has been paused as we plan for next year with the intention of appointing a new build partner.<\/p>\n

We expect to recommence construction as soon as practicable and continue to bring gigabit speed broadband to thousands more homes and businesses.”<\/p><\/blockquote>\n

Unfortunately, the trail then went silent until the most recent trading update in 2021, which has revealed that Lite Access have finally appointed FRP Advisory Trading Limited<\/strong> as administrators in order to protect their UK assets. At the same time the company’s President and CEO appears to be setting the company up for a legal fight with Cityfibre.<\/p>\n

Carlo Shimoon, President and CEO of Lite Access, said:<\/strong><\/p>\n

“In December 2020, the Company resumed partial UK operations, based on good faith discussions with its customer that certain contractual challenges would be addressed, and was working to build a pathway to increase the ramp-up of operations and was working with stakeholders to create a sustainable path forward incorporating planning and operational efficiencies and optimizing existing contracts.<\/p>\n

However, shortly after the continued discussions, the Company received a notice from its customer that the Company had allegedly committed a repudiatory breach of its contracts for FTTP<\/a> installation in Cambridge, Lowestoft and Bury St Edmunds (the \u201ccontracts\u201d) by its suspension of works.<\/p>\n

Based on the alleged repudiatory breaches, the customer has purported to terminate its engagement of the Company under all of the contracts. Notwithstanding the notices to terminate, the Company intends to vigorously defend its position that it was not in repudiatory breach of the contracts at the time of its receipt of the notices and is actively engaged with its UK legal counsel regarding this matter, as well as potential remedies.<\/p>\n

Consequently, the Company took immediate steps to mitigate any unnecessary cash burn for its UK operations and elected to file a notice of intent to appoint an administrator (the \u201cNOI\u201d) to create a moratorium over the Company in order to protect the assets of Lite Access UK. Subsequent to the fiscal year-end, in January 2021, the UK business officially appointed FRP Advisory Trading Limited as administrators. As a result, our year-end results were negatively impacted by a number of factors, including non-cash impairment charges of $4,736,127 and an accrual of $3,315,147 related to an onerous contract provision.\u201d<\/p><\/blockquote>\n

As it stands Cityfibre are still in the process of trying to find a new contractor to replace Lite Access in Cambridge, Lowestoft and Bury St Edmunds, which could be made more tedious by the threat of a legal challenge against their prior decision to terminate the associated contracts.<\/p>\n

Meanwhile, Lite Access has seen a gradual improvement in its share price from the December low (see below), although this partly reflects recent financing efforts, acquisitions, results and some contract wins in other markets.<\/p>\n

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