Davnet retains S'pore ops...for now

SINGAPORE--Australian facilities-based telco Davnet Ltd is still reviewing alternative plans for its Singapore operations, despite yesterday's decision to liquidate its assets in Hong Kong and shut down its subsidiary in Canada.

"The company's Singapore subsidiary (continues) to review its alternatives," said Davnet in a statement to the Australian Stock Exchange Monday.

The announcement followed Davnet Australia's deal with Denford Enterprises Ltd, a unit of the Investment Company of China (ICC), for a A$5 million (US$2.58 million) loan facility.

"This facility has been established pending finalization of a proposed capital raising from ICC, which would replace the loan facility," Davnet added.

According to the statement, the loan agreement allows the Australian telco to draw down up to A$5 million (US$2.58 million) over the period ending 15 January, 2002.

Equity Partners Asia Limited (EPA), the arranger of the loan, will conduct due diligence on Davnet from August 13 to August 31 to determine whether ICC wishes to subscribe up to A$5 million (US$2.58 million) for securities in Davnet.

Another announcement in relation to the status of the due diligence and the proposed capital raising can be expected by August 31, 2001.

In early August, the Australian firm cut funding to its Singapore, Hong Kong and Canadian subsidiaries to focus more on its business in Australia, which is said to be the company's only profitable operation.

As a group, Davnet reported pre-tax operational losses of A$33.2 million (S$31.1 million) in the six months ended December 2000.