Mystery surrounds Ionica shares

By Ian King

 

A mystery buyer is mopping up shares in Ionica, the fallen telephone company that lost its stock market listing last October.

Many of the 14,000 private investors who backed Ionica have been approached by Guy Butler, a subsidiary of City money-broker Garban, with a request to sell their shares.

Guy Butler is understood to be acting on behalf of one of the bondholders in Ionica and has been building a stake in recent weeks. Some of the bondholders are American and under US securities rules their identities cannot be made public, but investment banks CSFB, ING Barings and Paribas are leading members of the creditors' committee.

A spokesman for Amstrad tycoon Alan Sugar, who was previously linked with a bid for Ionica, said Sugar was not talking to the company at present.

Ionica shares, which were delisted after being suspended at 171/2p last October, are changing hands at between 8p and 12p.

The mystery buyer is said to be building the stake to safeguard its position ahead of a payout to Ionica's creditors. The US bondholders are threatening legal action and claim they were misled when they made their original investment. Speculation centres on a payout to creditors of as much as 20p in the pound. Ionica still has cash reserves of almost £30 million.

Ionica was one of the decade's great-est stock market disasters. Floated in July 1997 at 390p, the shares peaked at 421p on Ionica's plans to build a revolutionary phone network using radio signals rather than land lines. But when targets proved unrealistic, Ionica's bankers refused to lend more.

Last night, Ionica said the company was aware of the interest in its shares, but said it was too early to speculate about the final payout.

 

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