Austar, Dodo continue to back Comindico

Struggling network provider Comindico has received pledges of support from two of its largest customers as its Cisco-appointed receivers press ahead with plans to sell the company.The company's receivers, McGrath Nicol Partners, today released a statement confirming that Dodo Internet would continue to support the company, and that Pay TV and Internet provider, Austar, had extended its dial-up supply contract with the company.

Struggling network provider Comindico has received pledges of support from two of its largest customers as its Cisco-appointed receivers press ahead with plans to sell the company.

The company's receivers, McGrath Nicol Partners, today released a statement confirming that Dodo Internet would continue to support the company, and that Pay TV and Internet provider, Austar, had extended its dial-up supply contract with the company.

McGrath Nicol Partners today declined to comment on whether either company had attached special conditions to their agreements to continue purchasing services form the company.

Dodo is among a number of companies that have expressed an interest in buying the company.

Comindico was placed into receivership late September after negotiations over the future of the company between investors Cisco, JP Morgan and a new interest, B-Digital, broke down.

Cisco, owed AU$80 million through a vendor financing arrangement with Comindico, put aside terms of a two-year agreement with the network provider that would have seen it take a 15 percent equity stake in the company in order to place it into receivership.

Under the proposed deal Cisco was to be given AU$10 million of AU$27 million in new capital invested in Comindico by JP Morgan and B-Digital. In exchange, Cisco was to retire the remaining AU$70 million debt and take its 15 percent stake in the network provider.

Cisco's decision to pull out of the two-year agreement was greeted with surprise by industry observers.