Commsoft works on rescue plan

By PETER GRIFFIN

Software developer Commsoft will sell its intellectual property and take ownership stakes in the buyers in a bid to save itself from ruin.

The survival plan was revealed at Commsoft's annual meeting, where chairman Anthony Howard said the market Commsoft operated in "remains very difficult and shows little sign of immediate improvement".

Managing director Mark Lunt resigned this week but will stay on until the end of January to oversee the sale of the assets that make up the CallMaster, NetMaster, CellMaster and Brains software products.

The former chairman of systems integrator Gen-i took over at Commsoft in April and embarked on major restructuring to try to stem losses.

Auckland-based Commsoft lost A$6.4 million ($7.1 million) in the year to June 30, improving on an A$21.8 million plunge into the red in the previous period. A loss of around $1 million is expected for this year.

Howard said a de-listing from the Australian and New Zealand Stock Exchanges was not on the cards. "It will leave us with a shell with tax losses, and passive shareholdings in those companies distributing the intellectual property."

Negotiations were under way with two key parties to buy the intellectual property and a deal was expected to be struck soon. Howard would not reveal the monetary value Commsoft placed on its intellectual property.

As with battered tech investors Strathmore, IT Capital and the now defunct Eventures, Commsoft would pare costs back and sit tight until conditions improved to the stage where it could secure further investment.

Extensive redundancies have left Commsoft with just 20 staff, many of whom are expected to find new jobs with the buyers of the intellectual property.

At the meeting Commsoft abandoned plans to undertake a share consolidation at a ratio of 10:1 and dropped PricewaterhouseCoopers as the company's auditor. It will sign up a smaller auditor soon.

Commsoft's performance had begun to pick up, said Howard, and it had expected to ride out the lows of the IT sector and move on.

"I don't think anyone expected it to be as prolonged."