Banks run out of patience with Commander

Banks run out of patience with Commander

The industry is reeling following news that troubled ASX-listed integrator, Commander (ASX:CDR), has been put into receivership.

Steve Sherman and Max Donnelly of Ferrier Hodgson were appointed voluntary administrators to the company on August 7 – one day after it requested a halt on shares trading. Shortly after, Commander’s banking syndicate appointed receivers, Peter Anderson, Chris Honey and Joe Hayes of McGrathNicol, to the entire organisation and its affiliate companies.

“This action was taken following a decision by the company’s lenders earlier in the day not to grant a further extension of time for repayment of their facilities,” Commander’s ASX statement read.

According to ARN sources, Commander was about to announce a trading loss for the financial year to June 30. In June, the integrator warned investors its pre-tax profits would be downgraded from upwards of $20 million to between $4.5 million and $7 million excluding charges.

Commander’s receivers are now assuring customers and suppliers that it will continue to trade in the short-term. A McGrathNicol spokesperson said it is going through the books and working with suppliers to ensure it continues to function and pay the bills while it readies to sell the business.

“It is the receivers’ intention that all current Commander services will continue uninterrupted whilst the sale process is undertaken and that all Commander customer needs continue to be serviced,” McGrathNicol partner and co-receiver, Peter Anderson, said in a press statement. “There are no plans for major structural changes to the business while the sale process is underway.”

Despite a massive restructuring effort over the past six months, which included a realignment from low-margin hardware sales to managed services, Commander’s revenues couldn’t meet its debts, believed to exceed $300 million. The crippling weight of fees, coupled with pressure from banks and tighter trading conditions, is being blamed for its demise.

Commander went to market for prospective buyers in October last year but was unsuccessful. Since then it has been selling off non-core units including wholesale arm, Unitel, and its Affinity recruitment business. It has also undergone a management overhaul, which saw the abrupt departure of Adrian Coote, who was replaced by Orion Telecommunications boss, Amanda Lacaze, as managing director.

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