BREAKING NEWS: CommQuest unveils survival plan

Beleaguered digital media and marketing company CommQuest, which has been suspended from trading on the ASX for more than four months, has finally revealed a plan to recapitalise the group and pay down debt.

Under the plan, specialist small cap investment firm Co-Investor (which is backed by the Victor Smorgon Group) has arranged the re-financing of CommQuest’s debt and will inject $13 million into the group, in the form of $8 million worth of secured debt and a $5 million bridging facility.

As a result, CommQuest’s debt load has fallen from around $26 million to $13 million. CommQuest will also consider a capital raising to pay off the $5 million bridging loan.

Under the company’s restructuring plan, the group – which once consisted of 16 main divisions – will be reduced to seven main businesses: Smart Group, Next Digital, Austral Media, Inspirus, Infodial, SMS Central and Green Made Easy.

All other subsidiaries have been either sold (to third parties or their original principals) or closed. Most of the businesses that have been disposed of are in the public relations and marketing space.

Co-Investor’s managing director, Roger Sharp, will become chairman of the group. Chief executive William Scott will remain in the top job for six months before stepping down and becoming a consultant to the group.

“I am pleased that CommQuest has survived a very difficult four months of restructuring,” Scott said in a statement.

“As a relatively small, newly listed communications group, we were hit hard in some divisions by the change in market in November last year. The company needed to make
major changes to its operating structure in order to accommodate a radically different environment.”