Tycoon saves easyEverything from going bust

Stelios Haji-Ioannou has saved the easyEverything chain of internet cafes from going bust.

The entrepreneur behind easyGroup and easyJet is investing £15m in the business he founded two years ago after it spent £40m expanding across the UK and into Europe and the US.

As part of Mr Haji-Ioannou's Mission Possible rescue plan, two of the chain's 22 cafes - in Antwerp and Rotterdam - will close.

The rest of the business, which charges customers an average of £1 an hour for internet access, will be rebranded easyInternetCafe.

Future expansion will be based around London, Paris and New York, but the group says it has no plans to shut its cafes in Manchester, Glasgow or Edinburgh.

However, some of easyEverything's 400 staff may lose their jobs as the chain tries to automate as much of its in-store operation as possible to cut costs.

Mr Haji-Ioannou admits some mistakes have been made since the first cafe was opened in London in June, 1999, such as having cafes dispersed too widely geographically and opening sites that are too large for their local markets.

But he says: "I am looking forward to the next couple of years, when we will have to prove to the world that we have a valid business model that can make money whilst offering the consumer a great service at a great price."

In exchange for his £15m investment, he will receive 1.5 billion shares at a penny each, taking his stake in the business to 95%.

The rescue deal gives easyEverything a value of £15.8m, compared with around £100m when Hewlett-Packard and venture capital group Apax Partners invested in the business in May 2000.