Cellnet repays $10M loan

Australian distributor, Cellnet has repaid the $10 million, taken out as part of its strategic direction change.

Sandy Beard, chairman of Cellnet’s board told CRN that the loan was to be repaid by the first of December and was no longer needed because the company's situation has improved.

“Part of a strategy to strengthen Cellnet was making sure the debt was repaid,” he said.

“It’s a long way from being over – on getting it back on track. It’s slow, but we are surely going well, even in this tough environment.

According to Beard, after repayment of the above term loan the distributor's cash on hand will approximate $5 million.

"This is expected to improve as the company continues its orderly exit from its transactional stock holdings in the notebook and desktop distribution market," he said.

Beard said the company exited those markets because it couldn’t make a return on investment.

"As outlined in the announcement to the market on 31 October, the exit from this transactional business is expected [to] see the release of approximately $10 million in working capital as inventory and debtors are realised.”

He said the use of these additional cash resources expected to be released has yet to be decided on by the Board and could include growing the remaining parts of the business either organically or through acquisition.

“We are on track to ending with a strong balance sheet and having a profitable viable proposition for customers and vendors.”

“Cellnet is purely getting back to being a healthy business with profitability. There are a ton of initiatives,” said Beard.

When CRN inquired about any further warehouse closures or staff cuts, Bear said: “In terms of what we have done, they were initiatives we said we were going to do in earlier statements.”