Davnet looks to exit S'pore, HK and Canada
"(The company) has advised each of its subsidiaries in Canada, Hong Kong and Singapore that it will not be providing further funding to those operations at this stage and cannot say if this situation will change," Davnet said in a statement to the Australian Stock Exchange this morning.
"The company's operations elsewhere (in the US) will be reviewed in the light of the outcome of the discussions with (several unnamed) financiers," it added.
The announcement comes after share trading was suspended Wednesday in light of "a very comprehensive review process".
When contacted this afternoon, its Australia-based spokesperson, Michelle Adams, noted that "the decision...will see Davnet concentrate on the growth achievable in Australia", which she described as the company's only profitable operation.
However, Adams could not provide the expected cost savings from the move at press time.
Davnet reported pre-tax operational losses of A$33.2 million (S$31.1 million) in the six months ended December 2000.
"Davnet has not taken this decision easily, as we are acutely aware of our commitments to customers and to the markets," she noted.
That said, the company will not be servicing local customers from Australia. "A local presence (is required) to provide on-going maintenance services. As such, it would be impractical to service Asian (or overseas) customers from Australia," Adams noted.
According to her, customers in Singapore, Hong Kong and Canada have a choice of moving to another service provider, and Davnet will provide the technical support required during the migration period.
Davnet is said to have a total of 67 staff in the Singapore, Hong Kong, US and Canada.
It has wired up 16 buildings in Singapore and 20 in Hong Kong, selling corporate customers broadband Internet access.
Staff writer Susan Tsang contributed to this report.