australian article pls read

Optus eyes Commander

Print Page: Print Michael Sainsbury | October 19, 2007

JUNIOR telecommunications company Commander is up for sale after completing negotiations with its bankers to extend its debt facility and convincing its auditors to sign off its accounts.

The company's adviser, ABN AMRO, will throw open the doors of a data room next week to trade and private equity buyers understood to be interested in all or part of the company.

Commander chief executive Adrian Coote said the company had added $25 million in debt to its overdraft facility, which now totalled $385 million, about $50 million of which had not yet been drawn down.

He said the group needed to recapitalise by way of a sale or cash injection from a new equity partner.

Commander will relist on the stock market this morning after being suspended for almost three weeks. It was trading at 59.5c before being suspended.

The Australian revealed nine days ago that it was being prepared for sale.

"There is no change in the results from what we put out in August apart from a classification of our debt," Mr Coote said.

"At June 30 our debt was considered to be current rather than non-current."

After lengthy negotiations with a banking syndicate of Westpac, Commonwealth Bank and National Australia Bank, the debt is again non-current, with only $20 million owing by June 30, 2008.

"They are obviously very supportive of us and the facilities are fine," Mr Coote said.

"Clearly, if you are in suspension two things happen: one is that customers pay you a bit slower and your suppliers want to be paid a bit more quickly, and that is why we went and got additional facilities.

"I am really pleased that the accounts are out there. They are unqualified and, as we originally published, without any nasties."

No2 telco Optus is thought to lead Commander's likely trade buyers.

The company has been eyeing the group for a number of years and its own small business division has struggled to find customers.

The other obvious trade buyer is AAPT, Telecom New Zealand's Australian business.

TNZ has already bought in the Australian market this year, picking up listed telco Powertel.

It also has a new chief executive, Paul Reynolds, who must deal with a new structure forced on the company by the New Zealand Government.

Mr Reynolds has been in Australia this week, prompting talk that TNZ will at least participate in the Commander sale process.

Other buyers could be local private equity groups focused on mid-tier companies such as Champ, Archer and Ironbridge, which are also potential investors for a complete buyout or major equity investment.

Macquarie Bank is also believed to be a possible buyer.

Commander released its annual report to shareholders yesterday.

The document reveals that the telco's senior executives' bonuses have been cancelled after a horror year in which the group's share price hit a high of $2.28 before it fell to 59.5c, when shares were suspended.