Australian telecommunication carrier Davnet has told its subsidiaries in Singapore, Hong Kong and Canada that it will not provide them with any more funding at the moment. The announcement came as Davnet asked the Australian Stock Exchange (ASX) to suspend its shares last Thursday.
In a statement to the ASX, Davnet said it is "reviewing its operations in light of current market sentiment and the recent fall in the company's share price." Davnet said it has reached the stage of due diligence with several financiers and is continuing discussion with others and is working towards achieving a binding commitment with one or more of them by close of business on August 6.
Davnet's share price has fallen from A$1.49 in August 2000 to A$0.06 when trading was suspended. At the height of the tech stock boom, the shares were worth A$6.00.
Australian media suggested Friday that Davnet will exit its overseas businesses completely to concentrate on its Australian operations.
Davnet received a license to operate telecommunication services in Singapore in June last year and is providing broadband services to 40 customers in 10 buildings. It planned to wire up more buildings and to launch VoIP (Voice over Internet Protocol), video-multicasting, webcasting services, digital subscriber line (DSL) services and IP value-added services throughout Singapore.
In Hong Kong, Davnet operates a digital broadband network, and has also cabled fiber-optic networks inside 28 office buildings, with licenses for 17 more buildings. In Canada, Davnet planned to provide broadband services to more than 300 commercial buildings in five major cities. Davnet has a small operation in the US through an agreement with FiberNet Telecom Group.
Davnet said it will make a further ASX announcement before the commencement of trading on August 7.