Lenders To Give Verdict On 999 Network Sale

The future of the company which manages the communications network of Britain's emergency services is to be decided within weeks as Motorola moves to clinch Government approval for a takeover.

Sky News has learnt that lenders to Airwave Solutions will be asked to give their consent in the next couple of weeks to a deal that will involve Motorola Solutions (NYSE: MSI - news) buying the company in a deal worth close to £1bn.

Sources said on Friday that if the banks' approval is forthcoming, a takeover of Airwave is expected to be announced shortly afterwards, although its completion would remain subject to a green light from Home Office ministers.

Airwave provides communications services to the police, ambulance and fire services using conventional radio spectrum, having been established in 2000 under the ownership of what was then BT Group (LSE: BT-A.L - news) 's mobile phone division, BT Cellnet.

Motorola saw off a rival proposal tabled several weeks ago by Hong Kong Telecom, they added.

Airwave has been owned by infrastructure funds managed by the Australian bank Macquarie since 2007, while the company's main lenders are led by HSBC and include Lloyds Banking Group (Other OTC: LLOBF - news) .

A deal will be structured as a scheme of arrangement, a commonly used mechanism for effecting a takeover, sources said.

An auction of the emergency services network (ESN) provider has been running since before the summer.

One reason for its protracted nature has been the fact that the Government is overseeing a separate procurement process to appoint a provider of a new dedicated 4G network for the emergency services.

The new network would replace the existing radio system used by Airwave, and could be in place by 2017.

Airwave was among the original bidders for the replacement contract, but it failed to make the shortlist, while O2's withdrawal in June left EE as the sole remaining bidder.

In March, the Home Office said that Airwave Solutions, UK Broadband Networks - a subsidiary of Hong Kong Telecom - and Vodafone were no longer in the running for the contract.

Industry sources said they expected ministers to announce imminently whether EE - which is being taken over by BT Group - had won the new contract or whether the process would be re-run.

The contest to build and run a new ESN was launched by the Home Office in 2013, with the intention of awarding the contract in the late summer of this year.

However, continued delays means that the transition date could yet be pushed back.

There has also been speculation that Airwave could mount a legal challenge to a decision to replace it as the ESN provider, given uncertainty about its value once it loses the ESN contract.

Some experts have raised concerns about the intended switchover because of doubts that the new 4G technology will be ready and reliable.

The Airwave sale process is being run by Lazard, the investment bank, while Deloitte, EY and Rothschild have all had roles in the process advising either the Airwave board or the company's lenders.

The Home Office, Airwave and Macquarie all declined to comment on Friday.