Ionica chairman quits

NEWS East of England local loop provider, Ionica, today announced the departure of its chairman, Sir James McKinnon, after four years. No replacement has yet been found. The news comes as the telco admitted in its first quarter strategy document, released today, that it is still unable to find a strategic investor, even after three months of searching. The company also announced the closing down of its credit facility, which had been denied to it by its bank for some months. Ionica put a brave face on the situation, saying it still has £60m in the bank and a customer base that has grown by 18 per cent. However, pundits are concerned the company still has little in the way of financial resources to draw upon. John Matthews, principal consultant at Ovum, said: "The company is not looking very healthy. Closing the credit account was not a good sign. If it doesn't secure funding soon, it's sure to go belly-up." Ionica suggested the departure of McKinnon was due to his age, but Matthews insisted he had to make way for someone who can inspire confidence in investors. Matthews was not impressed with McKinnon's immediate replacement, Ionica chief executive, Nigel Playford. "It's good news because he has been active in the company for years. It's bad news because he was there when the trouble started," he said.