Investors could be left with nothing in Hibu fight

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The owner of Yellow Pages yesterday warned that its shares could be left with little or no value as it battles to turnaround its ailing printed phone book division.

Directories firm Hibu, formerly known as Yell, also admitted underlying earnings will fall below market expectations this year as its paper directory business struggles.

The gloomy update shocked investors as the Reading-based company’s already decimated shares plunged a further 36 per cent to stand at just 0.4p, giving it a value of £10.3m.

The group, which is buckling under a £2.2bn debt pile, warned certain capital structure options under consideration are likely to wipe out shareholders’ interests.

The group, which employs around 13,000 people, has attempted to reinvent itself by increasingly focusing on digital operations as it looks to offset the pressure on its printed directories operation.

It has rolled out eMarketplace, which provides small businesses with the infrastructure to sell online without having to set up their own website.

Despite the downbeat outlook, Mike Pocock, chief executive, remained bullish.

He said: “We are confident in the group’s four-year strategy to transform Hibu by capitalising on its unique position in the small and medium-sized enterprise community.

“The group continues to progress our new strategy, developing and piloting new digital products as well as progressing new partnerships, such as the payment services agreements announced recently.”

Hibu said it was encouraged by constructive discussions with its lenders concerning the balance sheet restructuring, which would give the group breathing room to support the legacy business and develop its digital strategy.

It was recently reported that a syndicate of banks have started work on the financial restructuring that will see a large chunk of the debts wiped out in return for control being handed to lenders.