ASX-listed Tennyson Networks has gone into voluntary administration after a share deal worth $9.8 million failed to eventuate.
The Melbourne-based voice and data vendor had intended to sell its flagship Smart Office eXchange (SOX) business when it came to an agreement with Melbourne IT company, Neoside, on August 8, 2003, in which the company would buy 391 million shares in Tennyson, worth a total of almost $9.8 million, making Neoside a 70 per cent shareholder in Tennyson.
According to a statement issued to the ASX, Neoside had defaulted on its Facility Agreement obligations by failing to provide cash advances, leaving Tennyson with insufficient working capital.
“The failure of Neoside to fulfil its obligations had been due to delays in completing a major transaction,” the report said.
However, Neoside has convinced Tennyson and its administrators that it will fulfil it obligations under the facility agreement and share subscription agreement by the scheduled general shareholder meeting on October 31.
Meanwhile, Tennyson appointed administrators Nicholas Brooke and Geoffrey Totterdall of PricewaterhouseCoopers on October 14.
"In view of Neoside's failure to provide funds and having considered Tennyson's current financial position, the directors have formed the view that the appointment of a voluntary administrator is required," according to a company statement.
The Neoside deal was critical to the continued development of Tennyson’s SOX telephone system business and Datareach broadband business (previously Ericsson Data Services) which it recently acquired from Ericsson for $1.4 million.
ARN was unable to contact Tennyson today as phones in its Melbourne office were unmanned.