FlowCom enters receivership

Telecommunications company FlowCom has gone into receivership after defaulting on monies owed to secured creditor Crown Financial.

Phil Carter and Greg Hall of consultancy PricewaterhouseCoopers were appointed receivers of the Sydney-based company Wednesday 21 January.

Lex Melzer, a spokesperson for PricewaterhouseCoopers, said that the receivership related to the holding company FlowCom and would not affect the daily operations of the telco's two wholly-owned subsidiaries Flow Communications and MacroCom.

"It is business as usual for them and the board of directors even of the holding company remain in place although they're not directing the business, because that passes to us," he said.

To pay off the as-yet-undisclosed debt, PricewaterhouseCoopers was seeking a buyer for FlowCom and had already had more than 25 inquiries, he said.

"That is extremely high level of interest but what counts at the end of the day is not so much the interested parties but their quality," he said.

Carter and Hall would take a couple of weeks investigating the financial status and assets of the business before the actual marketing of the sale would begin, Melzer added.

FlowCom has a range of data communications products including dial-up and DSL internet, web-hosting and wholesale carrier services, facilities management and e-commerce packages.

The holding company called a trading halt on 14 January pending clarification of the status of its arrangement with Crown Financial, following receipt of a notice of withdrawal of funding from Crown.

"The stated basis for the notice of termination was the timing of a quarterly interest payment due to Crown from FlowCom under a working capital facility. FlowCom has now paid what it believes to be the correct amount to Crown," FlowCom director Ed Goodwin said in a letter to the ASX on 14 January.

However, no further announcements were made before the appointment of the receivers this week.

FlowCom was contacted for comment but had not replied at the time of going to press on Friday.