US parent's move into chapter 11 is good news for us, says Primus Australia

Stuart Corner
Tuesday, 17 March 2009 04:14

IT Industry - Market

Primus Telecom Australia is putting a positive spin on its US parent's move into chapter 11 bankruptcy protection saying it could lead to more of the Australian subsidiary's cashflow being re-invested in the Australian business.

The US parent said that none of Primus' operating companies in the United States, Australia, Canada, India, Europe and Brazil were included in the filingfor chapter 11 and all were expected to continue to manage and to operate their businesses without interruption. "Employees, customers, suppliers and partners of these operating business units will be unaffected during what is anticipated to be an expedited financial restructuring of the holding companies," it said in a statement.

The CEO of Primus Australia, Ravi Bhatia, said: "This is good news for Primus Australia because it results in increasing Primus Australia's ability to re-invest in our local operations." He claimed that Primus Australia was "a solidly profitable business that generates significant positive cash flow, making us financially independent and self sufficient."

He added: "no employees, customers, suppliers or business partners in Australia will be affected in any way by the financial restructuring activities of the US holding company and there will be no loss jobs in Australia."

Bhatia said that a large portion of local profits that had been used in part to service the US holding company's debt "may now be available for investment in organic expansion as well as acquisitions of synergistic telecom businesses throughout Australia."

Bhatia said that since its inception in 1997 (he was the founding CEO, but later left the company for several years) Primus had invested in excess of $500m in its network and now had facilities in 66 POIs and 282 DSLAMs across Australia, and operated its own fibre network in the five major capital cities.

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