SolNet owed millions by Telemedia

Telecommunications software provider Telemedia's collapse has had flow-on effects with a number of companies, not least of which is SolNet, the local distributor and integrator for Sun Microsystem products.

Telecommunications software provider Telemedia's collapse has had flow-on effects with a number of companies, including SolNet, the local distributor and integrator for Sun Microsystem products.

Telemedia collapsed earlier this year owing $A13 million and still waiting to receive millions from its own debtors. The company, once valued at $A700 million, had decided to move its head office from Sydney to the US and had appointed two new board directors to help with the change in market emphasis when the end came.

Now it seems that SolNet is still owed several million dollars for its equipment bought when Telemedia company was running hot.

Although he won't confirm the exact figure, SolNet managing director Mark Botherway says the number is significant compared with SolNet's other debtors who are considered minor.

"They owe in the tens of thousands and it's not too much of a problem, but this one is significant." Botherway confirms the debtor owes "in the vicinity of, but less than" $6 million.

This is the first time SolNet has been bothered by debtors in its five year history. The company has yet to take ownership of the equipment which is "scattered throughout the world".

A new owner for Telemedia is expected to be announced in the coming weeks.

SolNet is flying high despite Telemedia's collapse, and has posted its first annual revenue figure in excess of $100 million.

"This is an increase of 15% over the last financial year," says Botherway.

SolNet has also recently launched its Australian operation - although Botherway concedes the Australia market is hardly the place to be at the moment.

"It's probably not the best time to launch into Australia however we've done it now and we're there."

He says the Australian subsidiary isn't profitable yet, as it's still carrying start-up costs associated with the launch. "It's not cheap putting 50-odd people into new premises."

However SolNet wasn't expected to make money in its first year of operation.

"Our best case scenario was break even and that didn't happen because of the macro-economic climate there."

Botherway does expect the company to be profitable in the next financial year, however, and says doing business in Australia requires some change in mindset.

"Our local managing director over there has been asked about when they set up their New Zealand subsidiary, which is interesting."

Botherway says most of the employees in both Sydney and Melbourne are Australian rather than imported Kiwis to help with that image.

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