Business & Finance

Administrators Appointed and Renouceable Rights Issue Withdrawn

May 30th, 2001

The Board of One.Tel Limited ("One.Tel") has today announced the appointment of Administrators to assist the company and address its immediate cash position.

Mr Steve Sherman and Mr Peter Walker of Ferrier Hodgson have been appointed Administrators of One.Tel.

One.Tel's overseas subsidiaries are subject to different laws and will be dealt with on a case by case basis.

One.Tel's auditors, Ernst & Young, informed the Board that due diligence investigations had revealed a capital raising of $132M would be insufficient to keep the company solvent. The renounceable Rights Issue to raise $132M can therefore not proceed.

The Board heard that a capital raising sufficient to meet the funding requirements was not available. As a result, the Board resolved to appoint Administrators and notify the Australian Stock Exchange of a suspension of trading prior to the market opening this morning.

The One.Tel board made this appointment after receiving advice from management and its auditors on One.Tel's financial position including its:
• Immediate cash requirements; and
• Cash requirements for ongoing operations.

The Board believes the appointment of the Administrators is in the best interests of One.Tel and all its customers, staff, creditors and shareholders.

Mr Sherman said while a review of One.Tel's operations was underway it would be business as usual for staff and customers.

"We will review One.Tel's operations and hold discussions with its major creditors to identify the best means of maintaining value for the benefit of its stakeholders. In the interim, One.Tel will continue to trade as a going concern."

The company's secretary, Alicia Parker, has stated that an information line will be established as soon as possible to update customers, staff and shareholders of developments.

One.Tel's shares were frozen at $0.16 today, while the stocks of its major shareholders, News Corp and PBL amongst them, fell in response to the announcement.