Comindico in administration

Stan Beer
Thursday, 23 September 2004 15:31

Four years and $400 million after bursting onto the local telecommunications scene as Australia's first IP convergent voice and data carrier, the Comindico group of companies has run out of cash and gone into voluntary administration.

Comindico blamed a failure to raise sufficient capital to meet short term debt commitments for its demise. According to the IP carrier, the appointment of administrators became necessary following a breakdown in negotiations with potential equity investors.

Comindico's high profile investors include AGL, AMP, The Packer Group's Consolidated Press Holdings, J P Morgan and Queensland Press, a division of News Limited.

The Comindico board claims that a planned capital raising would have been sufficient to address short-term debt as well as provide adequate reserves to enable the group to reach a position of positive EBITDA.

Peter Walker and Steve Sherman of Ferrier Hodgson, appointed as voluntary administrators of the group of companies, believe that Comindico can be maintained and sold off as a going concern.

The administrators intend to commence a formal sales process for the Comindico group of companies as soon as possible and say there is already interest from a number of parties.

Comindico has had a baptism of fire since its enormously expensive startup in 2000, which has so far cost $400 million, including $175 million in vendor financing by its main technology supplier Cisco.

High profile internet management personality, John Stuckey, resigned from his position as CEO of the company in April this year after a two year stint at the helm. Stuckey was reportedly unable to reach agreement with the board over the terms of his new contract.

After Stuckey's departure, CFO John Tierney was appointed acting CEO.

Comindico announced its move into voluntary administration after hours tonight, leaving PR company Gavin Anderson to field calls from the media.

The first meeting of the companies' creditors will be held on Tuesday 28 September 2004. All creditors will be advised of the time and place by the administrators.

In the interim, the administrators and management are maintaining the supply of services to Comindico's customers.