Former owner of Magnet forgave €19.6m in loans prior to sale

The former owner of Magnet Networks wrote off nearly €20 million in loans it was owed prior to selling the telco to State-backed Speed Fibre Group late last year.

Ken Peterson's Columbia Ventures, which had owned Magnet for 16 years, forgave €19.6 million in intercompany loans as part of the recent sale, company documents show.

Magnet Networks came into being in December 2004 when Mr Peterson's investment firm, which also previously owned the Hibernia Atlantic transatlantic fibre optic network, bought Leap Broadband, which was set up by brothers Charlie and Rory Ardagh.

Speed Fibre Group acquired Magnet last year. No price was disclosed for the deal at the time but newly filed accounts for the parent indicate the transaction value was €20.5 million, which comprised €11.4 million of a convertible loan note and €9 million in cash. The Irish Infrastructure Fund-backed company is also the owner of Enet.

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Company documents indicate Magnet owed more than €30 million in loans at the end of 2020, of which €7.9 million was converted to equity and a further €19.6 million written off.

Magnet recorded revenues of €18.6 million last year, down from €21.1 million in 2019. However, chief executive John Delves told The Irish Times recently that the company planned to more than double turnover to €50 million in the coming years.

Pretax profits for the year totalled €17.2 million after the loan write-off compared with a €7.68 million loss in 2019. Shareholders’ funds totalled €6.6 million at year-end as against a €24.9 million deficit for the previous 12 months.

The company employs about 80 people, with staff costs falling to €4.17 million last year as employee numbers fell from 92.

Magnet, which operates in both the business and residential telecoms markets, offers fixed and wireless broadband, voice and managed services. Its network reach comprises 40 unbundled Eircom exchanges and 32 Fibre To The Home residential housing developments in Dublin, Laois and Meath.

Magnet’s parent Speed Fibre recorded revenues of €48.7 million last year, up from €43.2 million in 2019. It fell into the red however, reporting a €129,425 pretax loss versus a €1.6 million profit a year earlier.