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Commander Saves Its Cash |
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Written by Adam Gosling
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Tuesday, 01 April 2008 |
Cash strapped Commander Communications has sold another of its non-core assets in a reversal of a deal done a year ago. Nexon
Asia Pacific was sold back to its original owners in a return of the
asset which allowed Commander to avoid paying the operation's original
owners a A$9.5 millionearnout due in April.
Commander originally purchased Nexon from
founders Charles and Barry Assaf effective March last year, the two
former owners have since stayed on with the company but will now take
back the business.
The
precise details of the original transaction were never revealed to the
market, but the ASX listed Commander issued the pair with 3.8 million
convertible notes with a face value of A$2and a redemption date of 30
April. Commander had also committed to pay a deferred consideration now
calculated to be worth about AUD1.5 million on the same date (payable
either in Commander shares or cash).
Selling
the Alcatel reseller back to its original owners means the heavily
leveraged company can avoid paying approximately AUD9.1 million for the
transaction.
Instead Commander will swap the
business for the notes and the deferred consideration. It will also
forgive approximately AUD1.9 million in inter-company amounts due from
Nexon to Commander and will pay around AUD0.7 million in tax
liabilities owed by the Nexon operations.
In
a statement to the ASX Commander said the sale marks another milestone
in the implementation of Commanders Turnaround Plan. Commander Managing
Director/CEO AmandaLacaze was quoted as saying" We are delighted to
announce the sale of Nexon to the original founder of Nexon, Charles
and Barry Assaf. They have nurtured the business, its customers and
staff and I believe Nexon will prosper under their guidance."
The
transaction is the third sale of non-core assets since the troubled
company held a data room exercise in an effort to find a buyer for the
business as a whole. When no interested parties stepped forward the
company began a sell off of smaller non-core operations including the sale of Unitel and its Enterprise
ICT business in Western Australia.
The
company's share price has remained relatively stable for the past month
improving from an all time low of AUD0.097 to trade around AUD0.13
cents.
In the announcement to the ASX Charles Assaf, said: "We are very pleased to have reached this agreement with Commander."
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