Desperate Pipe Networks seeks extension

Cable funding plans in doubt as negotiations continue

Pipe Networks' last gasp negotiations to salvage its PPC-1 pipeline project to provide a broadband connection between Australia, the US and Asia will continue until next Monday after it failed to finalise new finance arrangements needed to complete the initiative by its deadline today.

Pipe Networks is also a partner of New Zealand provider Kordia in its bid for a tender to lay a new trans-Tasman cable.

On December 2, when Pipe warned the ASX funding for its project might be conditional, Kordia said it remained confident the trans-Tasman cable would go ahead.

However, Hunt's tone when interviewed by Computerworld yesterday was more subdued.

"We are looking with interest at what they have to say over the next few days," he says. "We've talked to Pipe and have no other information. We hope they'll be able to work through it. If not we will look for other partners."

Hunt says the project is very commercially viable and he fully expects it to go ahead.

Earlier this week Pipe entered a trading halt after its negotiations for bridging finance from ANZ and Westpac failed. It indicated that an alternative plan would be in place by today, but has now filed for an extension of its trading halt until next Monday.

"The reason for the suspension of securities relates to the ongoing negotiations which have progressed significantly, yet are still incomplete and remain confidential. The outcome of these negotiations is likely to affect the company's share price as previously identified," Pipe company secretary Malcolm Thompson said in an Australian Securities Exchange filing.

It is thought that the company's plans involve both seeking early payments from its customers, which include iiNet, Internode, Primus, VSNL and Telikom PNG, until the project is completed and negotiations with its supplier VSNL International to delay ongoing payments until it starts making money from the cable.

— MIS Australia, additional reporting by Computerworld

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