Tennyson collapse puts jobs at risk

By PETER GRIFFIN

A question mark hangs over 25 highly skilled jobs in Napier after Australian-listed telecoms equipment maker Tennyson Networks called in the administrators.

Melbourne-based Tennyson appears to have collapsed after failing to raise much-needed capital. In August it completed the acquisition, for an undisclosed amount, of Swedish equipment maker Ericsson's successful Napier division, Ericsson Data Services.

Tennyson's shares, which last traded on the Australian Stock Exchange around 3Ac, have been suspended "pending the appointment of voluntary administrators to the company".

Exactly what went wrong at Tennyson is unknown. Its Australian management team have gone to ground and staff will not respond to inquiries at the Napier operation, which was renamed Datareach.

PricewaterhouseCoopers is understood to have been appointed an administrator of the business, meaning it may now wind down the business and sell its assets or try to sell Tennyson as a going concern.

Datareach makes internet access equipment, which under Ericsson was sold mainly in Poland.

In its accounts for the latest year to June 30, Tennyson reported a loss of A$3.2 million ($3.7 million) on revenue of just A$1.8 million. In the previous year the loss was A$4.9 million.

The acquisition of Datareach was expected to boost Tennyson's fortunes considerably. Datareach had sales of A$8 million in the six months to June 30 and earnings before interest, tax, depreciation and amortisation of A$2.5 million.

In a meeting scheduled for the end of the month, Tennyson was planning to seek shareholder approval to raise nearly A$10 million through the issue of shares to Australian company Neoside, in a deal that would have given Neoside 70 per cent of the company. Tennyson also wanted approval to change its name to Fusia.

In a notice of meeting document, PricewaterhouseCoopers noted that Tennyson had a "critical shortage of working capital" and had been reliant on advances from shareholders and a A$2 million loan facility from Neoside to buy Datareach.

PricewaterhouseCoopers did not respond to interview requests.

In addition to its staff in Napier, Tennyson has 22 workers in Australia making computer telephony products. Datareach appears ripe for a management buy-out or sale.