With outstanding debts in excess of AU$600 million and AU$12million a week needed to survive, One.Tel's administrator will wind down operations within the fortnight.
"During the course of the next seven to 14 days we will begin a very controlled wind down of the company's operations," Ferrier Hodgson partner and joint voluntary administrator, Steve Sherman, told a packed media conference after the company's initial creditor's meeting in Sydney today.
"In the last several days we have been successful in negotiating an agreement with both Optus and Telstra which provides some continuity of services to our One.Net mobile customers," Sherman added.
"We have also initiated an action in respect to bundling up the initial assets we have in terms of our fixed line members and our next generation subscribers and we hope to sign a deal in the next 24 to 48 hours."
Sherman, who was besieged by reporters and camera crews, said that he hoped to see all One.Tel customers moved to alternative services within the next 14 days.
Sherman said he estimated One.Tel's debt to be in excess of AU$600 million -- with workers' entitlements estimated to be AU$19 million.
One.Tel has in excess of 3000 creditors -- significant creditors include Telstra, Optus, Compaq and Lucent.
Telstra and Optus -- jointly owed AU$100 million -- are unsecured creditors.
"The secured creditors are what I would call the next generation group of companies," Sherman said.
This would include the 18-bank syndicate that funded the AU$1.15 billion next-generation network that Lucent built in conjunction with One.Tel.
That has been drawn down to approximately AU$50 million that One.Tel is indebted to the banking syndicate and Lucent, Sherman said.
Pressure builds
On the back of the telco's collapse and public pressure from the Prime Minister down, former One.Tel directors have made offers to help out company creditors, including its 1400 staff.
"At the moment both haven't landed a cheque on my desk," Sherman said.
Keeling has offered to underwrite a portion of employee entitlements relating to accrued annual leave only as long the administrator cannot realise assets in excess of AU$3.5 million, according to Sherman.
Of Keeling's offer, Sherman said: "We significantly anticipate realisations in the mass of that [AU$3.5 million] therefore Keeling's offer may pale into insignificance."
"Mr Rich's offer is somewhat different to Mr Keelings -- it involves a contribution to a possible deed of company arrangement in the event that one is agreed to by creditors," Sherman said.
Rich will commit approximately AU$4.2 million -- the Net amount he received on his reported AU$6.9 million bonus -- as long as he sells his swanky harbourside home, "Craigend".
Rich will also commit to the deed the balance of the money representing approximately AU$2.1 million, if he is able to recover it from the tax department.
Share offer
Rich made also available to the possible deed, 500 million One.Tel shares.
"We will need, as the administrators, need to review that [Rich's] proposal and report finding to creditors who ultimately have to make a decision as to whether they accept the deed or whether One.Tel moves into liquidation," Sherman said.
Although employees' entitlements rank behind the administrator's costs and expenses associated with maintaining the company (AU$12 million a week), "I remain confident that we will gain enough money to process workers' entitlements," Sherman said.
The Communications and Public Sector Union was less than convinced.
"Our concern is that offers from Keeling and Rich come with some conditions attached," it said.
"The offers should be unconditional and put in a trust fund for staff."
The CPSU said it was seeking meetings with Optus and Telstra to pick up some of One.Tel's redundant workers.
"Telstra and Optus are taking One.Tel's customers and should also fulfil their responsibilities and take on its staff."
One.Tel's administrator said staff would be shown the door " as early as the end of the week".
I would like to contact the administrators as One.Tel deducted money from my account which was 60% higher than previous accounts.
Can you supply a contact address?
Regards,