Aberdeen Faces $271M Fund Hit After Airband Collapse, Source Says

Aberdeen Suffers $271M Hit After Airband Broadband Provider Collapse

Aberdeen Faces Major Write-Off Following Airband Administration

Aug 28 (Reuters) – British asset manager Aberdeen will take an about £200 million ($271.72 million) hit to one of its infrastructure funds following the collapse of UK broadband provider Airband, a source familiar with the matter said on Friday. 

Aberdeen’s Response to Airband Collapse

“Following a disciplined review of future funding requirements and risk-adjusted return prospects, we made the difficult decision to cease further funding,” an Aberdeen spokesperson said.

Aberdeen declined to comment on the size of the write-off.

Details of Airband’s Administration and Asset Sale

Airband’s Entry into Administration

• Airband entered administration amid significant sectoral headwinds and subsequently sold its assets and customer base to UK-based broadband company Voneus.

Acquisition by Voneus

• On Friday, Macquarie-backed Voneus said it completed the acquisition of Airband’s assets and customers, but did not disclose any financial terms.

• The deal was struck at a sum in the single-digit millions, according to a report by the Financial Times, which first reported the write-off on Friday.

Impact on Lenders

• Airband’s lenders, including HSBC and Lloyds, will also take a hit from the sale of the broadband provider, the FT said citing people familiar with the matter.

• Lloyds and HSBC declined to comment.

Broader Market Context and Future Outlook

Challenges Facing Smaller Broadband Providers

• Airband’s collapse comes as many smaller broadband providers struggle to earn a return, after BT and dozens of so-called altnets poured billions of pounds into fibre networks over the past decade.

Aberdeen’s Statement on Market Headwinds

• “Airband has faced significant headwinds consistent with those affecting the wider UK fibre market, including higher build costs, slower customer growth, increased competition, and a challenging financing environment,” an Aberdeen spokesperson said.

Portfolio Performance and Investor Outlook

• Aberdeen added that Airband was one investment within a diversified portfolio that had otherwise performed strongly and was still expected to deliver positive overall returns to fund investors.

($1 = 0.7361 pounds)

(Reporting by Iain Withers in London and Ankita Bora in Bengaluru; additional reporting by Krisha Bhatt; Editing by Jonathan Ananda)