KPNQwest network may be split up

Trustees of KPNQwest are meeting today to persuade the receivers to sell the business as a whole rather than piece by piece.

The French and German trustees of KPNQwest are determined to sell off the parts of the network within their jurisdiction separately from the rest of the company so they can pay off creditors.

However, a spokesman for the main trustees of the Dutch-based carrier said: "The trustees know the network is worth much more as a whole than in bits. The trustees are having a general meeting today to convince some of the receivers, especially those in Germany and France, that it is better to sell the network as a whole."

The problem is that under French law the trustees have to get money to pay off debts as soon as possible, rather than wait for a sale of the entire network.

Dutch venture capital fund Trimoteur has been involved in talks with the trustees over the weekend to buy KPNQwest's entire network.

The trustees' meeting to consolidate the selling process today is thought to be a primer before it goes ahead with complicated negotiations with Trimoteur for a total network sale.

Graham Kinsey, spokesman for eBone (the backbone of KPNQwest's 25,000km network) at KPNQwest's network operations centre in Belgium, said: "We know there are still offers on the table. A UK consortium led by Oakley Investment is after parts of the network and Trimoteur is after the whole thing, including eBone.

"However, we are losing customers by the day. We have now lost about 20 to 25 per cent of our customers. Yet, for the time being, there is every reason to keep the company going.

Kinsey added: "On Friday the banks won a case in court that allowed them to keep customer's money which had been paid up front in good faith to maintain the network for a few more weeks. Because of that, of the 200 staff given their jobs back after KPNQwest went bankrupt, only the Belgium eBone 40 are going to get paid for over a week's hard work."

Three KPNQwest engineers based in London have only recently been told that their work to keep the UK network running had been for free after they were promised a wage.