Cornered! is a blog devoted, most of the time anyway, to telecommunications: local and global issues, technology, people and trends from the perspective of someone who's been reporting, analysing and commenting on the industry since the dark ages (BC - before competition). Sometimes serious, sometimes flippant, sometimes frivolous. Controversial, analytical, informative, amusing, but never boring; a vehicle for examinations of important issues and observations on my encounters and experiences in an industry where polarised views and hyperbole are the norm.
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Cornered! Engin: We've blown $26m; we got it wrong, now give us $8.4m to keep afloat
Cornered! Engin: We've blown $26m; we got it wrong, now give us $8.4m to keep afloat | Engin: We've blown $26m; we got it wrong, now give us $8.4m to keep afloat |
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| by Stuart Corner | |
| Monday, 25 February 2008 | |
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Page 1 of 3 Just about the only information in the 34 page prospectus is contained in chairman Ian Smith's letter in which he says the money is needed to "address the immediate cash burn issue; to provide the funding needed to complete the strategic restructure of the business [and] provide capital to grow the subscriber base in the broadband telephony environment and allow the business to consider deploying additional complementary products such as broadband and TiVo and provide ongoing working capital." Engin had cash and cash equivalents of $3.5 million at 31 December but burnt through half of this ($1.7m) in January. The prospectus offers no guidance as to the future prospects of the business. The offer is fully underwritten by Seven subsidiary Network Investment Holdings. In his letter, Smith explained that: "your company will be going through a period of further restructure in order to maintain its underlying operation, align overheads and staffing more closely with the current revenue base and position it to grow...As a leading player in the broadband telephony market we believe there are substantial opportunities to be gained by focusing on our core telephony business, achieving a cost base appropriate to that business and positioning it to grow...The board and management are confident that shareholders will be best served by a focus on the core telephony business." Most of the $26 million Seven pumped in went to build customer numbers for Engin's VoIP service but, as iTWire has previously pointed out, the cost per customer aquired was an order of magnitude greater than that of rival provider, Mynetfone. |
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