Newcall sells offshoot

By ADAM GIFFORD

Struggling listed company Newcall Group has sold its Energy Online electricity retailing subsidiary to Genesis Power, clearing the way for it to explore opportunities in broadband internet.

The sale is subject to approval by the Commerce Commission and Newcall shareholders.

Newcall owns 75 per cent of Energy Online, with founders Don Cheeseman and Stephen Eskrigge also taking the opportunity to sell.

Newcall managing director Jim Bracknell said the price would not be revealed until a letter went to shareholders, but it was enough to clear the balance sheet, with some cash left to move ahead.

According to Newcall's half-year result to June 30, total shareholder equity was negative $4.1 million.

"It [Energy Online] is an asset that has tremendous value, but we cannot reflect that value on our books until we have made this transaction," Bracknell said.

"We are dead in the water until we get our balance sheet in order."

The sale leaves Newcall with internet service provider Iprolink and Newcall Technology, which sells the specialised utility billing software developed for Newcall's original telephone business.

That business was closed last year and the customers sold to TelstraSaturn.

Newcall reported a maiden profit for the six months of $365,936 on gross revenue of $12.12 million, with Energy Online contributing $91,000 on earnings of $10.1 million.

The Energy Online assets were valued on the books at $2.225 million.

The company has about 20,000 customers, mainly in Auckland, Bay of Plenty, Waikato and Hawkes Bay.

Genesis chief executive Murray Jackson said Energy Online would be a standalone business within Genesis, which has 450,000 residential customers and 2200 large commercial clients.

Bracknell said Newcall's future lay in combining the strengths of Iprolink and Newcall Technology.

"This whole area of broadband access to the internet, coupled with some of the rural access projects being supported by the Government, will afford us a lot of opportunity," he said.