Commander eyes Comindico's customers

Commander managing director, Adrian Coote, said Commander already had its own network but that "[he'd] be silly to say that [the company] wouldn't have a look".

Coote said that the Internet and telecommunications provider would welcome the chance to examine Comindico's books to explore the prospect of taking over its customer base.

"We wouldn't be buying it just for the network -- it would be the quality of the customer base that we would be interested in looking at," said Coote.

Commander joins Comindico customer Dodo Internet in publicly declaring its interest in buying the company.

Cisco's appointed receivers, McGrath Nicol Partners, today said that the sale -- which will be advertised in newspapers tomorrow -- had already attracted a significant amount of interest from buyers.

McGrath Nicol released a statement late today assuring Comindico's customers that it had reached agreements with the company's key providers ensuring its ability to continue to operate throughout the sale process.

However, all of this appears to be putting a veneer of normality on a growing sense of uneasiness within the industry about the chain of events that lead to Cisco's decision to put Comindico into receivership.

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

Under the deal Cisco was to be given AU$10 million of AU$27 million in new capital invested in the company by JP Morgan and B-Digital. Cisco was to be given its stake in exchange for retiring the remaining AU$70 million debt.

However, sources close to the deal said that Cisco declined to provide B-Digital with "certain assurances" and the deal fell apart.

JP Morgan called in administrators Ferrier Hodgson to take over the company's affairs last Wednesday, but within 24 hours Cisco gazumped the process and appointed receivers, McGrath Nichol Partners.

Privately, industry sources said JP Morgan was mighty annoyed over Cisco's decision to withdraw its support from the company.

Cisco's move has been greeted with surprise as Comindico finally appeared to be running out of red ink, having been EBITDA positive for the past four months.

It's left the industry awash with rumours that a deal to sell the network provider to a major carrier had been decided long before the negotiations took place.

Cootes who today decribed Cisco's decision as "stunning", said he was aware of the rumours but that the Commander "wouldn't operate on the basis of speculation".