Nigel Playford, founder and chief executive of Ionica Plc, the biggest flotation embarrassment of 1997, has been shoved unceremoniously out of the driving seat in a board room reshuffle designed to put some life back into the flagging radio telephony company. Playford, who became a paper multi-millionaire when his ill fated company floated last July, has been replaced by Mike Biden, the chief operating officer. Playford has been offered the watered down role of deputy chairman. The incumbent finance and commercial directors, John Edwards and Derek Laval, have also gone, and at least 100 staff in the firm’s development team are out of a job. Ionica’s troubles stem from a massive slow down in the company’s new subscriber rates. It supplies wireless telephony services to homes in the east of England using base stations linked to customers via radio signals. But problems with the capacity of the base stations, supplied by Canada’s Northern Telecom Ltd, have led to saturation of the equipment at urban penetration rates as low as 3%. The lack of subscribers has brought Ionica into breach of its banking covenants and a failure to meet population coverage targets is likely to breach conditions linked to its operating license. Discussions are underway to re-negotiate both, and the board reshuffle is a sacrificial offering to appease bankers and regulators alike. Ionica’s shares, floated in July at 390 pence, sank to a low of 60 pence but have since recovered to close at 93.5 pence on Friday. Playford, who owns nearly 6% of Ionica, has seen his shares lose 30m pounds in the process.
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