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To: SEC-ond-chance who wrote (82943)	1/13/2003 9:08:30 AM
From: StockDung	Read Replies (1) of 122087

New Tel rescue push given flick thewest.com.au By Neale Priorand Fran Spencer STRICKEN junior telco New Tel's survival prospects fell yesterday when administrator Phil Carter gave the thumbs down to the latest rescue bid from suitor Broadband & Wireless and tipped litigation could give better returns. The PricewaterhouseCoopers insolvency partner said he had examined a bid circulated by the suitor on Wednedsay and would recommend to creditors at a meeting today that Osborne Park-based New Tel be put into liquidation. Mr Carter said he had concluded liquidation was the best option after examining the trade-off between the immediate return offered by the restructure bid and the potential for tens of millions of dollars in litigation by liquidators. "The bird in the hand is not sufficiently attractive," he said. Mr Carter said potential legal actions related to suspected preference payments to creditors, suspected trading while insolvent and for uncommercial transactions. A supplementary report on Broadband & Wireless' $12.5 million rescue offer for New Tel will be handed to creditors who attend a meeting in Sydney this morning and will include a recommendation they reject the bid. The creditors will vote on whether the company should be put into liquidation or for the meeting to be adjourned so Broadband & Wireless could be given more time to put its offer into a form that could be voted on as a deed of company arrangement. New Tel fell into administration last month after weeks of speculation about the group's woes and the collapse of a deal that would have seen Broaband & Wireless acquire major trading debts from Telstra Corp and Optus. In a report to creditors, Mr Carter suggested New Tel could have traded insolvently for as much as a year but warned he would need to conduct a detailed examination before reaching firm conclusions. The liquidator has previously not given a recommendation on the latest bid despite rejecting two other offers put forward by Broadband & Wireless. Mr Carter's recomendation to reject the company's latest offer, however, has not made liquidation certain. Broadcast & Wireless has hired professional lobbyists to sell the bid and win proxy support from creditors. It has sought to woo the big-ticket creditors, Telstra, Optus and rival carrier AAPT, with a preferential offer of at least 65¢ in the dollar. Employees and secured creditors would be paid in full under the latest bid, as would creditors owed less than $10,000. Ordinary creditors owed $10,000 or more would get a lump sum of $10,000. Broadband & Wireless front-man Richard Steggall said he was confident of gaining the necessary support from the major creditors. Mr Steggall said Mr Carter had not been able to tell creditors how much a liquidation would recover on their behalf, whereas BWL's proposal guaranteed $12.5 million with more expected to be recovered from the sale of New Tel assets. Mr Carter said his view on potential litigation in liquidation was based on a preliminary analysis of the affairs of New Tel and his knowledge and gut-feel from his experi ence in insolvencies. "This is all about money and getting people their money back," he said. "I am not some liquidation junkie. I am confident of my reasons for my recommendation. I have courage of my convictions." © 2003 West Australian Newspapers Limited All Rights Reserved. Top Home

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