I so hope this doesn't happen. It'll be bad for broadband customers all-round.
Threat to unplug Comindico
September 25, 2004
THE operations of failed $350 million teleco Comindico hung in the balance last week, with network suppliers threatening to cut off services unless payment guarantees were signed.
Comindico has about 40 wholesale customers, mostly smaller internet service providers, on its network.
The company's biggest customer is internet service provider Dodo, which has about 200,000 subscribers.
The move follows a decision on Thursday by US technology giant Cisco Systems - the company's equipment supplier and vendor financier - to appoint its own receivers, McGrath Nicol, to the company.
This effectively gazumped the voluntary administrators - Ferrier Hodgson, appointed by the Comindico board on Wednesday night - and handed Cisco effective control of the company.
Yesterday, McGrath Nicol was in urgent talks with Telstra, Optus and AAPT in an attempt to ensure the telcos continued to provide critical network services to Comindico. But the failed company is understood to have outstanding bills owing to the three companies totalling almost $10 million.
It also has about $35 million in finance leases, including telecommunications capacity, as well as a bridging finance facility of about $25 million.
It is understood that the suppliers were seeking to have their bills underwritten by the receivers before they would guarantee continued supply.
Cisco's decision to protect its $80 million debt from Comindico is the final part of a two-year, multi-tranche refinancing scheme that failed at the final hurdle this week.
It is understood a $27 million deal to refinance the company by shareholder JP Morgan Partners fell over at the company's board meeting in Sydney on Wednesday after Cisco withdrew its support for Comindico.
The plan was to try to eventually bring B Digital, its recent acquisition - telco reseller Digi Plus - and Comindico together, sources said.
Once this was completed, Cisco would wipe its $70 million debt and take a 15 per cent equity share in Comindico.
But Cisco's actions in appointing the receivers mean it can now get up to $70 million in any sale instead of only 15 per cent.
As the holder of the company's debt, Cisco takes precedence over the equity investors, which include AGL, AMP, JP Morgan Partners, the Packer group and Queensland Press.
In a statement, Murray Smith and Tony McGrath of McGrath Nicol said: "The receivers advise that they intend offering the business for sale as a going concern as a matter of urgency in order to protect both the inherent value of the business, and the immediate interest of the company's customers.
"During the sale process, Comindico will trade as normal, meeting its operational commitments to its clients.
"The receivers will commence the sale process immediately, and expect to capitalise on significant interest in the business that has already been expressed."
Cisco's actions echo those of fellow US manufacturer Lucent Technologies which appointed its own receiver to the failed One.Tel mobile network, which had been built using $650 million in vendor financing from Lucent.
Atleast you guys can chose who your High speed internet provider is, in NZ we have TelstaClear and Telecom, Telecom is everywhere and TelstraClear is just in big cities, sadly I'm just outside that area so I'm stuck with Telecom's average ADSL with speed of 256/128 when all my friends have lovely TelstraClear Cable up to 10Mbit.
Telstra shut's off? When!?!? I've had Telstra cable for 2 years before (01/02) and ADSL now, it's NEVER disconnected ever.
Honestly mate, you have got to be dyslexic or something. Are you really in Sydney or are you on another planet???
BA'1.5' Pursuit 290
Lightning Strike / Reflective Orange Stripes 'General' Dog - AP's German Shepherd and Best Mate - 02Dec1998-15Dec2003.
'Pepper' Dog - General's and My Little German Shepherd Sweetie - 1996?-02Apr2006. 'Sako' Dog - My Beautiful and Pretty German Shepherd - 2001?-23Aug2006.
I'm in a dilemma at the moment. I've heard horror stories where people have had their adsl disconnected for no apparent reason and had to reapply going through the whole feasibility study again often taking 2 weeks, all the while some other applicant is granted the last remaining node on the rim.
My service providers wholesaler is comindico. What do I do? Do I transfer my connection to Tel$tra or Optu$ or do i wait and see what happens?
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