Share price slashed for Virgin Mobile IPO

The Virgin Mobile float has hit a hurdle - a lack of enthusiasm from investors - that has left the virtual mobile network operator having to cut its share price to stir up some interest.

The shares were planned to hit the stock market priced between £2.35 and £2.85 each but it seems takers weren't forthcoming and the stock price will be floated at between £2.00 and £2.20.

The number of shares released to the public has also been cut, with the £230m to £279m of stock earmarked for IPO reduced to just £125m to £138m - around a quarter of the company.

Investors had expressed concerns that the previous stock price was too high but Branson is thought to be pushing ahead with the IPO to enable the company to float its US arm later this year.

The re-valued stock puts the value of Virgin Mobile at a minimum of £500m. Virgin Mobile is the fifth-largest mobile operator but rents its network space from T-Mobile. It currently has around four million subscribers - almost ten million behind its nearest rival, O2, which has over 13 million.

Trading in Virgin Mobile shares will begin on Wednesday.