Commander sells Nexon back to founders

Australian telecommunications service provider, Commander Communications Limited has today entered into an agreement for the sale of Nexon Asia Pacific Pty Limited, back to its original founders, Charles Assaf and Barry Assaf.

The sale of Nexon comes less than two months since Commander sold Unitel, its wholesale network services business arm to M2 Telecommunications and its Western Australian enterprise ICT business assets, in an attempt to rescue itself from financial trouble.

The Nexon transaction was expected to be completed by late afternoon on the 28 March 2008. As part of the original purchase agreement Messrs Assaf received 3,800,000 convertible notes with a face value of $2 each (which were due for redemption on 30 April) and were to receive additional deferred consideration now calculated to be approximately $1.5 million due on 30 April 2008, payable either in cash or in Commander shares.

Commander originally purchased Nexon from Charles Assaf and Barry Assaf with economic effect from 1 March 2007 and has now agreed to sell Nexon back to Messrs Assaf who have been employed in a management capacity at Nexon since 1 March 2007.

Amanda Lacaze, managing director/CEO of Commander Communications said as consideration for the purchase of Nexon under the transaction, the convertible notes will be redeemed and the deferred consideration amount of approximately $1.5 million will be forfeited by Messrs Assaf.

“In addition as part of the agreement with Messrs Assaf, Commander will forgive approximately $1.9 million of inter-company amounts due from Nexon to Commander and Related Corporations of Commander and will pay approximately $0.7 million of tax liabilities on behalf of Nexon,” she said.

As a result of the transaction, Commander will not have to fund a likely cash outflow of approximately $9.1 million on 30 April 2008 which would have otherwise been required under the original purchase of Nexon, claimed Lacaze.

Nexon is the third non-core asset sale by Commander, following the sale of Unitel Australia Pty Limited and Commander’s Enterprise ICT business assets in Western Australia in February.

Lacaze said this is a further step in the delivery of the key elements set out in the Company’s Turnaround Plan announced on 30 January 2008.

“We are delighted to announce the sale of Nexon to the original founders of Nexon, Charles and
Barry Assaf. They have nurtured the business, its customers and staff and I believe Nexon will prosper under their guidance,” she said.

Targeting mid-sized companies with 50-200 employees, Nexon designs, implements and manages telecommunications solutions with a focus on call centre environments. Nexon also offers network services and resells Alcatel PABXs.

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