NewTel poss. admin.

  1. 218 Posts.
    New Tel teeters
    By Michael Sainsbury and Geoff Elliott
    November 12, 2002

    FACED with the stark reality of having its telecommunications services discontinued, listed Perth based re-seller New Tel is preparing for voluntary administration.

    The company is understood to have been exploring the option yesterday, with a decision to take the step expected as early as today.

    Company officials last night declined to comment on speculation New Tel offices had been raided by the Australian Securities and Investments Commission. ASIC also declined to comment.

    The impending administration follows an unsuccessful week in Sydney for big-spending New Tel chief executive Peter Malone.

    After a weekend at his beachside mansion, Mr Malone returned to Sydney's $325-a-night five-star Westin Hotel yesterday.

    New Tel's major creditors, Telstra and Optus - between them owed close to $20 million - were behind attempts at creating a rescue package.

    A proposed deal with fellow junior telco RSL Com was nixed early on, and it's now considered too late for Mr Malone to pull off a last-minute deal to save the company.

    Any administrator could quickly unwind such a deal if the company has been trading while insolvent.

    Sources have also hosed down Mr Malone's speculation that he was taking a look at Kerry Stokes's fading B Digital mobile resale business.

    According to newspaper reports, major backers of the telco - Perth-based lawyer Peter Jermyn and his associate Andrew Waller - have set in motion moves to dump Mr Malone and New Tel chairman Harry Sorensen.

    Mr Jermyn and Mr Waller are associated with 12 per cent shareholder Wainter, and have said they own about 20 per cent of New Tel stock.

    Backers and shareholders have become increasingly frustrated with Mr Malone's lavish lifestyle. He bought a Jaguar after the success of New Tel's $200 million fund-raising in 2000. Recently, he bought a $400,000 Astin Martin.

    But a deal to put the company into voluntary liquidation could see at least 240 jobs saved as the company tries to trade out of its troubles.

    Mr Malone's assistant told The Australian last night she was trying to contact him: "I'll certainly try, but I haven't had any luck. He doesn't seem to be answering his mobile phone."

    The Australian

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