Struggling telecoms group Energis was bailed out by its banks in a move that sees former Asda boss Archie Norman take over as chairman.

The Conservative MP has been parachuted in after Energis' 16 banks bought the company's UK operation in a complex financial restructuring.

Mr Norman said the widely expected deal provided an opportunity to rebuild a strong business for the customers, employees and investors.

The banks have set up a new company called Chelys, which is injecting £150 million into Energis UK and drawing up new banking facilities.

Energis' Dutch operation is set to be sold while the future of the group's Polish joint venture is still unclear.

The telecoms group warned earlier this year it was at risk of breaching its banking covenants after running up debts of more than £1 billion.

The banks have converted their loans into a controlling stake while Energis' bondholders and shareholders will own 8.25 per cent voting rights in the business.

The move follows the banks' rejection of an approach by venture capital firms Carlyle Group and Apax Partners for Energis earlier this month.

Mr Norman was linked to an earlier venture capital bid and kept in touch with the consortium of banks during the recent talks.

He said yesterday that financial security for the business and "the prospect of building a great team" were his conditions for helping out.

The deal came after shares in Energis were suspended on the London Stock Exchange at just 0.90p, a far cry from the 771p hit in early 2000.

Energis plc was placed into administration with Ernst & Young to enable the sale of the core UK business to the bank consortium.

Energis UK's new capital structure has to be approved by 75 per cent of the plc's creditors.

Shareholders will only be able to secure some cash if a sale or flotation of the business realises in excess of £1.8 billion in the next seven years.