Commander has announced the sale of subsidiary Unitel to telecommunications group M2 as the first step in its campaign to prune non-core aspects of its business.
The sale of its wholesale network services arm, scheduled to be completed by 22 February, will bring Commander a minimum of AU$10 million, with an extra AU$2.5 million if the Unitel business meets revenue milestones over 36 months.
"The performance milestones are based on meeting a certain minimum billing level," Commander CEO Amanda Lacaze told ZDNet.com.au. "It is my firm belief that they are both realistic and achievable."
In addition, Commander will supply Unitel's wholesale network for up to three years, or as long as both parties are happy with the arrangement, Lacaze said.
"I am very pleased with the sale price and very pleased with the structure," Lacaze said.
The sale is part of Commander's turnaround plan released last week to cut operational costs by focusing on the most profitable parts of the business. Six hundred jobs will be cut as part of the plan, with the redundancies currently being investigated by the Workplace Ombudsman.
Unitel staff however won't be cut: M2 is also offering to retain them. "In the initial period the Unitel business will stay in Sydney with the same staff and management," M2 company secretary Kellie Dean told ZDNet.com.au adding that she did not imagine there would be a lot of change after that.
Unitel customers can expect to continue "business as usual" according to M2. According to the company, not only was the sale financially attractive -- slated to increase earnings per share by close to 50 percent -- but it also offers the company strategic benefits, such as expanding its wholesale customer base considerably.
