VIA.Net Works Faces Cash Crisis, Seeks Buyer

VIA.Net Works is seeking to sell assets to stave off an "urgent liquidity problem," continuing the turbulence and consolidation in Europe's hosting industry. The Amsterdam-based provider is seeking emergency loans, but exploring the sale of "all or part of its business."

VIA will run out of cash in early April, according to a press release Thursday. The crisis comes just 12 months after VIA.Net Works purchased Amen's large shared hosting operation, and just six months after it told investors it had $42 million in cash. VIA.Net Works is currently the seventh-largest European host, as measured by active sites.

Largest European Hosting Companies, March 05
Hosting Company Active
Sites
Country
1&1 Internet AG 2,341,930 Germany
Strato AG 1,111,476 Germany
FastHosts 235,961 United Kingdom
PIPEX Communications 222,759 United Kingdom
Aruba 217,568 Italy
Komplex 142,692 Germany
Via Net.Works 134,411 Netherlands

If VIA.Net Works is unable to find financing, its hosting operation would likely be of interest to competitors. VIA says its hosting unit is profitable, while its losses are focused in its legacy businesses (including Internet access) and VIA Express, a new initiative featuring low-margin products and services.

The deal is the latest in a merger-filled year for the European hosting market. In 2004 deals, Freenet bought Tect's hosting operation, Host Europe PLC was bought by Pipex, NetBenefit bought London-based rival Easily Ltd., and Lycos Europe bought United-Domains of Munich. That's in addition to VIA.Net Works' purchases of PSINet Europe and Amen, which now face the potential to have their third owner in less than a year.