After racking up an $8 million bill in just one year on the line, fledgling cellphone carrier Ozone Wireless was reportedly nearing a deal with investors and creditors.
Majority shareowner Dr Nicholas Kelly had reported last month that the company would be undertaking a three-year debt reprofiling programme in an effort to clear its debts to more than 30 creditors.
In an update today, Kelly told journalists that after a two-hour meeting with creditors he was confident that Ozone was closer to implementing its restructuring plan.
As many as 30 of the firm’s 32 creditors agreed that the company was still viable and gave their support, Kelly said. The other two “didn’t say no it is not viable; they just say they were not sure we could achieve this plan”, he added.
The restructuring plan involves getting the creditors “to agree to us deferring payment of the debt so that we can use the income that we do have to pay our monthly expenses”, he said.
Ozone would also renegotiate the rates at which it was paying its creditors, who include providers of antennae and site services, he told reporters.
“So I have been working with Flow and Digicel and all the [antenna] landlords, to lower our network costs. I am pleased to say that we have had a lot of positive response from everybody. I wouldn’t say that everybody signed off but we have a very positive response,” he said.
Of the 31 antenna rental sites, about eight of them are Flow-owned and a similar number belong to Digicel, while the rest belong to other private companies or the Government.
“Those contracts were negotiated at very high rates. I don’t think they were realistic at the time but the people that negotiated them didn’t realize they wouldn’t get the numbers to support paying those in time. So the burn rate was too high and they just ran out of money too quickly,” he declared.
Insisting that Ozone was still a viable third player in the telecoms industry here, Kelly said he has identified two companies that were interested in investing.
Opting not to give details, Kelly would only say “one of them is going to partner with us and hopefully if all things turn out well they will relieve a lot of our cash flow issues by providing us with the hardware we need to get
the customers . . . so that is where we are at”.
He also pointed out that once the restructuring plan was completed the company would be coming full force with a marketing plan “to get a lot more customers”.
The company’s voice customer base had dwindled from just under an estimated 3,500 to reach just over 1,400 paying customers in the last three weeks, due to its recent connectivity and financial issues.
Kelly disclosed that when he took over the operations he found that the company’s wage bill was in excess of $250,000 a month because a lot of the staff were overpaid and the company was “horribly overstaffed”.
Staff numbers have since been slashed to 12, with a wage bill of just about $60,000 per month.
Stating that he had already invested some $2 million in the operations, Kelly gave an assurance that the company remained a viable player, adding that “if it wasn’t viable in the future I wouldn’t be wasting your time, my time or anybody else’s time. We would just shut down”.
He denied rumours that Ozone was either owned by Flow or was in no negotiations to sell to the telecoms giant.
“We are 100 per cent owned and operated by Ozone and we plan to remain that way,” said Kelly.
“Hang in there. We are still around and very much alive. We are not planning to go anywhere and within a couple of weeks your problems will be resolved and we will take care of you . . . We will make it worthwhile,” he said in an effort to calm the fears of frustrated customers.