The chief executive of South Western Wireless Communications Company has pinned the downfall of the Sydney-based telecommunications company on his co-director's decision to withdraw funding from the business.
Around a dozen employees lost their jobs through the closure of SWWCC, whose core business was selling internet and telephony services, as well as building portable modular data centres to power wireless internet services in regional and remote communities.
Geoffrey Peach, the company's director and former chief executive, told administrator Farnsworth Shepard that a cessation of funding from other director and chairman Peter Bartter was key to the company's financial difficulties.
“One day the chairman decided to stop providing funding without notice,” Peach told the administrators.
Farnsworth Shepard reported that SWWCC "heavily relied" on funding from Bartter and his trust, Peter Bartter Track Ptd Ltd, which is also a secured creditor of the company.
Bartter attributed the financial issues of SWWCC to an “operating cashflow shortfall” from his related entities. The administrator’s report indicated that Peter Bartter Track loaned SWWCC $1.5 million on 27 April 2016.
The company called in administrators in early March.
According to a list of unsecured creditors in the administrator's report, SWWCC owed $71,000 to Vocus and more than $53,000 to TPG subsidiary AAPT. Other creditors include IT services firm Correct Solutions and electrical wholesaler Haymans Electrical.
The company’s assets have since been sold to Sydney-based cloud solutions provider Field Solutions Group (FSG) for $493,915 in cash on 26 March. The company also took on 12 out of 23 SWWCC’s employees.
It has been recommended that the company be wound up due to its insolvency. A deed of company arrangement was not proposed.
According to the administrator’s report, the company was restructured in July and August 2017 through debt forgiveness transactions, resulting in related party loans of $9 million being converted to shares in associated holding company South Western Wireless Holdings.
CRN has reached out to Peach, Bartter and SWWCC.