Open Telecommunications has gone into voluntary administration after directors failed to raise much needed capital from the sale of a core part of its business.
The company was banking on the sale of it Operations Support System (OSS) business to OpenCI International, a wholly owned subsidiary of Macquarie Bank, which it hoped would provide up to $3.1 million in funds. However, this proposed sale fell through late last week. This money was required to offset some of the $42 million in losses recorded in its financial year ending December 31, 2001.
A statement issued to the Australian Stock Exchange on Friday read: "The directors have resolved that in their opinion, the company is insolvent or likely to become insolvent within the foreseeable future." As a result, Deloitte Touche Tohmatsu has been appointed administrator of the company.
Sydney-based OpenTel provided monitoring and management products for network operators and telecommunication carriers, two industries which are in financial difficulties worldwide.
Before Friday's news, trading of the company's shares had been suspended until the July 24, 2002 on the grounds that a dispute with one of its customers could affect its share price. During this trading halt, the company's managing director and chief executive officer, Colin Chandler, along with chief financial officer Shane Hodson, announced their resignations from the board, leaving the running of the company to Wayne Passlow.
When it last traded, shares in the OpenTel stock were valued at 5 cents.