High-profile Help Puts $5m Into Rescuing Davnet
Sydney Morning Herald
Tuesday August 14, 2001
Billionaire investor Mr George Soros and Milan's de Benedetti dynasty have come to the rescue of Australian junior telecom Davnet, handing the embattled tech play a $5 million loan facility.
Davnet has also moved quickly to stem the flow of losses spurting from its international operations, announcing yesterday it had appointed a liquidator to its Hong Kong subsidiary, ceased business in Canada and was reviewing its presence in Singapore.
But Davnet shares will remain frozen until at least August 27, as the details of the refinancing package are ironed out. This extends the stock's total time in suspension to nearly four weeks.
The cornerstone of Davnet's effort to stay afloat is a $5 million financing package from Denford Enterprises, a company owned by the Hong Kong-based Investment Company of China (ICC).
The ICC backers include Mr Soros, the de Benedetti family and other prominent global investors such as the University of California, Case Western University and Trust Company of the West. ICC is headed by high-profile Hong Kong investor Mr Alex Adamovich, who sits on the boards of several Australian technology companies such as Hostworks Group and Ambition Group.
Following proper due diligence, ICC will subscribe for up to $5 million in Davnet securities and will immediately subscribe for $750,000 worth of converting notes.
Mr Adamovich said last night he intended to use his experience and contacts to deliver new opportunities to the struggling Davnet. Davnet chief executive Mr Hal Turner said the deal would put the company on a sound financial and management footing.
© 2001 Sydney Morning Herald
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