Cabling and network integrator Yost Technologies has been placed in voluntary administration, citing interruptions to recent outsourcing contracts with Telstra as the prime reason for its financial difficulties.
Gregory Keith of Grant Thornton Chartered Accountants has been appointed as administrator for the company, which is a 100 per cent owned subsidiary of ASX-listed Triton Corporation. Triton is an unsecured creditor for approximately $4.2 million.
The majority of Yost Technologies' contracts involved the provision of services to telecommunications giant Telstra. As reported in ARN in February 2001, Yost was a sub-contractor for the ABB Group in the design, maintenance and upgrade of the carrier's Customer Access Network, contracts estimated to be worth in excess of $30 million over three years. Managing director Garry Yost said he had set up Yost Technologies to turn over between $2.5 million and $3 million a month, based largely on these Telstra contracts.
"We had good months up until the end of May, then in June and July it all dried up," he said. "Telstra turned the tap off - and it has had a terrible effect on people in the game."
Although Yost Technology's business relationship with Telstra will continue, Yost said the carrier is starting to "shut up shop" on its contractors. "They speak with a forked tongue," he said. "They had promised to commit 20 per cent of their revenue to outsourcing - upwards of $4 billion. In our area, we would be lucky to have seen $100 million all up."
"It will have a huge impact on the Australian economy," he said.
Vivian Caldwell, executive chairman of Yost Technology's parent company, Triton Corporation, said the administrator has been given a brief period of time to determine whether it can trade the company out of its present situation. "As the second largest single shareholder, I am optimistic Yost still has a bright future," he said.
Creditors will first meet for preliminary discussions on Tuesday, August 14. The creditors will meet again in mid-September to decide on the company's future.
Telstra was unavailable for comment at the time of press.