"Under the agreement, Eisa was required to have financing commitments in place last month. It is clear that Eisa is not in a position to meet that requirement," UUNet said in a statement released today.
Eisa's intended acquisition of OzEmail, worth an estimated $350 million, came to grief earlier this week when Fairfax online division f2 announced it had ended its memorandum of understanding with Eisa.
According to the deal, f2 was to pay $40 million to acquire a 5 per cent equity stake in Eisa at $2 per share.
Further strife hit Eisa today, as market spectators watched shares plummet well below 40 cants today, following yesterday's announcement that Eisa chairman John Pascoe and director Michael Ball had both resigned for medical reasons.
Prior to the stock market crash, Eisa shares were trading as high as $3.18, before plunging to 93 cents on the morning of April 17.
Other funding for the OzEmail acquisition was to come from Mike Fitzpatrick Hastings Funds Management, ANZ and Disney.
OzEmail is Australia's second largest ISP, claiming a subscribing customer base of 350,000.
UUNet said in its statement that it would consider other offers to sell off OzEmail "if the right opportunity was presented".
UUNet refused to comment and Eisa did not return IDG's calls.