Chelsfield grabs the rest of Global

PROPERTY group Chelsfield is to take full control of loss-making internet hotels group Global Switch, buying out the remaining shares for £35m from TrizecHahn. It will launch a one-for-15 rights issue to raise £46.6m to pay for the deal.

Internet hotels - offices built to house web companies' servers - once seemed a sure-fire way of riding the dotcom boom, and Chelsfield bought a 33% stake in Global in 2000. Before the dotcom bubble burst, chairman Elliott Bernerd talked about hiving off the division into a separate quoted entity worth £500m.

Today he said: 'I believe that the outcome can produce good returns for Chelsfield, albeit from the reduced investment base.'

Losses from Chelsfield's existing stake in Global Switch were £76.3m in 2001, pushing the group £25.6m into the red despite a 23% rise in operating profits to £70.7m.

Bernerd has appointed a new chief executive for Global Switch, Andrew Vander Meersch. The group has a finished facility and a half built one in London and space in Frankfurt, Paris and Amsterdam. Bernerd told shareholders the properties were good quality and 83% occupied.