KPMG appointed amidst CityReach anger
KPMG Corporate Recovery has been appointed administrator to CityReach International, after angry creditors demanded their money back from the pan-European internet DataCentre operator.
The Big Five firm was also appointed administrative receiver to four CityReach subsidiaries.
CityReach went into administration yesterday after frustrated creditors turned up at its offices demanding cash payments. The company had run out of cash due to lack of demand for its web hosting and co-location services.
KPMG is hoping to sell five of the company’s eight centres, but the others, which are almost unused or not fully open, are likely to be closed.
KPMG partner Jim Tucker, who was appointed administrator, said: ‘We are working with management and are confident of selling the core CityReach sites in London, Amsterdam, Dublin, Stockholm and Budapest as going concerns.
‘Numerous parties have already made contact with us to explore purchasing the CityReach assets in part or whole. We expect further interest from a number of other European and US companies to progress this opportunity to acquire City Reach’s state of-the-art facilities.’
In September last year, the company raised £106m in the largest ever equity financing in the United Kingdom for a privately-owned technology company.
Founded at the height of the internet boom, CityReach received £249m in funding from investors over the last two years, including JP Morgan, Merrill Lynch, and Vulcan Ventures, the personal investment vehicle of Microsoft co-founder Paul Allen.
The company, which employed 270 staff was headquartered in London’s Docklands with offices in eight European cities including Paris, Berlin, and Dublin.
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