The collapse of telecommunications company Commander Communications could leave up to 30,000 small and medium companies scrambling for a new supplier of telephone and IT management services.
The collapse of telecommunications company Commander Communications could leave up to 30,000 small and medium companies scrambling for a new supplier of telephone and IT management services.
Commander was placed into receivership on Friday after the company’s banking syndicate refused to grant the company an extension on the repayment of more than $300 million of debt.
The banking syndicate appointed McGrathNicol as receivers after the Commander board appointed Ferrier Hodgson as voluntary administrator.
McGrathNicol will now look to run Commander on a “business as usual” basis while it tries to find a buyer or buyers for Commander’s various divisions and has assured customers that services will not be interrupted.
“It is the receiver’s intention that all current Commander services will continue uninterrupted whilst the sale process is undertaken and that all Commander customer needs continue to be serviced,” McGrathNicol partner Peter Anderson said in a statement.
It is estimated around 30,000 small and medium businesses use Commander’s telephone systems and IT management systems. Commander also provided IT management services for several state and federal government departments, including the Department of Parliamentary Service, which gave Commander a one-year extension on a $3.8 million IT contract just weeks ago.
Commander’s collapse comes just eight months after the company overhauled management and began a desperate attempt to cut debt and restructure. Under new chief executive Amanda Lacaze, Commander shed more than 600 jobs this year and offloaded non-core assets. The company announced a $245 million loss for the six moths to 31 December 2007 but despite improving its cashflow position in recent months the turnaround was just too slow.
Already there is speculation about potential buyers for parts of Commander’s business. Telstra and Optus could be interested in parts of the company and smaller IT firms such as DWS and Data 3 have also been mentioned as potential bidders.
Shareholders, who have watched Commander’s stock dwindle from around $2.75 at start of 2007 to 8.2c before the company’s collapse, are likely to end up empty-handed.
Administrator Max Donnelly from Ferrier Hodgson says it appears the banks are unlikely to recover all their debt, which means there is little change of other creditors and shareholders getting a return from the sale process.
The first creditors meeting will be held on 19 August.
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