No vendors are not asking for cash up front. All of Commanders major suppliers are using Credit Insurance to cover their credit exposure with Commander. I expect however that those Credit Insurance providers will review the amount of credit they are prepared to insure against, after the release of the latest Commander results. Six months ago, the Credit Insurnace providers, reduced the amount they were prepared to cover for Commander, by roughly half. So as I said yesterday, given the latest results, form your own view as to what is likely to happen now.
Commander have definitely signed some new customers, however it is my view that they are loosing far more existing customers, than they are winning new ones, hence it is a net negative situation. In addition, new customers generate less net return than existing customers do, so it is really a loose/loose scenario. I'm sure that HHL will be looking into this situation closely.
The IPEX business is a conundrum for Commander. IPEX kit is used for the Managed Services business, which Commander choose to keep. IPEX also has warranty requirements which need to be contractually honoured. I believe that there is also is a large amount of goodwill still sitting on Commander's books, relating to IPEX. It is my opinion that they will exit the IPEX business, provided they can legally do so and providing they can accomodate the write-down, from a financial perspective. Commander tried to sell the IPEX hardware business, even before the recent troubles began and I believe that they were unable to attract a single bidder. You can form your own view as to the value of the IPEX hardware business.
I hope that Commander can turn the business around, but unless there is some substantial, tangible change very shortly, it is my view that there situation is becoming intractible.
Some one made a recent posting that said the auditors believe Commander is a going concern, only whilst asset sales continue. If that is true, then they clearly need to turn things around very quickly.
Regards
Tails
CDR Price at posting:
0.0¢ Sentiment: Sell Disclosure: Not Held
