Esprit Telecom's share price rocketed Monday after the company resolved the internal problems that have dogged the company for the last few months.
Shareholders voted by a clear majority to remove company co-founder and former chairman Walt Anderson from the board of directors at an Extraordinary Shareholder Meeting in London.
Proposals made by Anderson hinself to remove the company's existing chief executive, two outside shareholder directors, and new chairman from the board of directors, were rejected.
Since Esprit was founded in 1992, its strategy has changed from reselling network capacity to building its own pan-European network, an expensive strategy that Anderson is believed to have resisted.
Venture capital shareholders had called for Esprit founder Walt Anderson to be removed from the board of directors in October, after the board had already voted him out of the position of chairman.
Stock traders in New York reacted positively to the news, and to Esprit's better than expected financial results released Friday. By mid-morning, Esprit's share price on the Nasdaq composite index had risen 10.6 percent to $28.75 from its opening price of $26.
Esprit chairman, Robin Biggam said he was "most gratified" with the vote, which would enable the current management "to move forward with its plans to capitalise on its strong position as one of Europe's leading independent telecommunications companies."
Esprit said its financial results for the last year exceeded its expectations and that it has the cash to fund the continued expansion of its fibre optic network. A financing deal announced last week with equipment supplier Nortel Networks will also help fund growth.
For the year ended 30 September 1998, net losss before tax was #42.1 million, over four times more than the #10.8 million loss reported during Esprit's last financial year. Turnover for the year nearly doubled to #82.5 million from #45.4 million a year earlier.
During the last three months, Esprit has increased the number of broadband customers on its London-Paris network to nine, and launched a national Synchronous Digital Hierarchy (SDH) network in the Netherlands.
Esprit's 9,000 kilometer high-capacity network, which will connect 614 major European cities, will open for business ahead of schedule, in mid 1999.
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