the times20 Jul 2018 09:54
People’s Operator seeks loan until numbers add up
An ethical mobile phone provider that counts Jimmy Wales, the Wikipedia founder, as one of its largest shareholders has been thrown a lifeline that could prevent it from going bust.
The People’s Operator yesterday revealed that it has entered talks with a new investor, who is lending the company cash to tide it over until the sale of its American division completes. The bridging loan would convert into new shares in TPO, giving the white knight a sizeable, but undisclosed, stake.
The new investment, which came weeks after Mr Wales stepped down from the board, could save the mobile phone company from insolvency.
The People’s Operator was floated at the end of 2014 and, despite being little more than a start-up, was valued at £100 million, with investors drawn to the cachet of Mr Wales and Andrew Rosenfeld, the property tycoon who founded the network two years before. It also had Sean Parker, the Napster founder and former Facebook president, on its global advisory board.
TPO hoped customers would be attracted by being able to divert 10 per cent of their bill to a charity of their choice, with the company giving a quarter of its profit to good causes.
However, TPO failed to fulfil its promise. In 2015, Mr Wales took over as executive chairman after Mr Rosenfeld died, while its US launch was delayed.
It has agreed to sell its US business, with the proceeds earmarked to repay a £1 million debt but it has had to seek bridge financing. “Once the US sale completes, it will be a viable business,” a source familiar with the company said.
Its shares peaked at 144p in 2015. When trading in them was suspended last month, they had tumbled to 0.005p, valuing the company at £151,066.
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