Telcos deal final blow to New Tel
By Fran Spencer
AUSTRALIA'S biggest telecommunications companies have dealt the death blow to junior carrier New Tel, weighing in against smaller creditors to reject a final rescue bid and push the company into liquidation.
But the battle might not yet be over, with the spurned suitor yesterday threatening to seek a court injunction to stop liquidation proceedings amid claims New Tel administrator Phil Carter misled creditors on the merits of the Broadband & Wireless proposal, including its funding.
After emerging from a four-hour meeting in Sydney, Mr Carter said he had "backed his own judgment" and cast the deciding vote to place the company into liquidation.
Mr Carter said "some three quarters" of the meeting time was given over to discussing BWL's proposal, with the Hong Kong-based investment group allowed to make a presentation to creditors.
A subsequent vote to adjourn the meeting for 14 days to allow consideration of the offer was split, with 92 creditors owed a total of $8.3 million voting for the adjournment and 42 creditors owed $35 million against.
A final vote on whether to liquidate the company once again pitted New Tel's major creditors - Telstra Corp, Optus and AAPT - against the smaller creditors, with 43 votes worth $37.4 million for liquidation and 88 votes worth $7.9 million against.
However, Mr Carter used his vote as chairman of the meeting to seal the company's fate.
"My responsibility as administrator is to form a view to put to creditors. I'm paid to call it as I see it and not withstanding the offer . . . I believe it was in the creditors' best interests as a whole to move to liquidation," he said after the meeting.
"(Liquidation) puts more in our armoury."
Mr Carter confirmed he would turn his attention to investigating alleged insolvent trading by New Tel, which investigations by the Australian Securities & Investments Commission had indicated could stretch back as far as a year before his appointment on December 10.
"A best case of up to $15 million" could be recovered through legal action, possibly in conjunction with ASIC," he said.
He had prepared some notes for creditors on BWL's offer before yesterday's meeting, but the offer had been lodged late and in a form which "did not comply with the law" which meant creditors could not vote directly on the proposal.
On Sunday, Mr Carter said he had assessed the offer and did not believe the immediate return it offered outweighed the potential for tens of millions of dollars from a liquidation.
But BWL's Richard Steggall, after the meeting yesterday, claimed Mr Carter had misled creditors about BWL's ability to fund its proposal.
"He misled creditors by advising them that Mario Salvo's solicitor had told him we weren't getting the full sum of the funds from (Mr Salvo) . . . Phil Carter advised creditors he didn't believe we had the funds," he said. "What the solicitor actually said was that (Mr Salvo) was prepared to put up the full amount of cash but BWL reserved its rights to fund a portion of that amount externally if it found cheaper funds."
Mr Salvo, a Perth businessman and New Tel shareholder, had pledged $8.5 million to fund BWL's third offer for the company. The previous two were rejected by creditors.
Mr Steggall said in view of the support from the smaller creditors, BWL believed Mr Carter should have adjourned the meeting to allow proper consideration of the offer.
"On that basis . . . we have advised we would be seeking an injunction (today)," he said.
January 14, 2003
© 2003 West Australian Newspapers Limited
All Rights Reserved.
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