Telco says it has cash despite loss

Wireless telecommunications operator Woosh says it has the support of its main shareholder and the cash to pay its bills despite its balance sheet revealing a $38 million loss.

Woosh founder and chairman Rod Inglis said the company was virtually debt-free, cash flow positive and had $950,000 in the bank.

Accounts for the year ended June 30, 2009 show the company recorded a loss of $38 million, almost 80 per cent more than the $21 million lost in the previous year.

A revaluation of Woosh's network assets, which saw an impairment of its network assets by 60 and 70 per cent, was the major contributor to the weakened balance sheet.

Total assets are valued at $13.3 million, down from nearly $50 million in 2008.

Inglis said using the existing network assets for the deployment of a new wireless technology could see the underlying assets gain value.

Liabilities stand at $25.7 million, most of which are non-interest bearing loans from majority shareholder Kuwait Finance House, said Inglis.

In the 2009 financial year Kuwait Finance House added a further $1.78 million loan to the $17 million it had advanced the company.

He said the non-interest bearing nature of the loans have the effect of making the loans similar to shareholder funds and address the company's ongoing solvency.

Notes to the accounts state Kuwait Finance House has confirmed its support for the business for the next 12 months.

Woosh has sought to strip out costs, cutting expenses by nearly 20 per cent, but revenue is flat.

Loses before interest, tax, depreciation, amortisation and impairment have more than halved to $3.26 million.

"At the moment all we're doing is sustaining our business, looking after our cash and looking after our customers," said Inglis.

Woosh, which began business as Walker Wireless more than 10 years ago, has faltered on its way becoming a wireless broadband provider.

Over that time shareholders have stumped up close to $170 million with the company accumulating losses of $180 million.

Woosh pioneered wireless broadband with a TDD CDMA network but the technology has been eclipsed by WiMAX and mobile broadband technology.

This has resulted in the company revising its wireless strategy with planning and modelling under way for a WiMAX technology network. Building is expected to kick off in the next 12 months, contingent on funding.

Woosh is likely to begin by converting its existing Auckland, Wellington, Christchurch and Southland network areas to WiMAX, with cell-tower sites in Hamilton acquired and consented.

Inglis alluded to device and funding negotiations but said all deals were cloaked in confidentiality agreements.

"I think, rightly, I'm persevering to try and create some value for shareholders," said Inglis.