Embattled London-listed corporation Coms plc has tasked Knight Corporate Finance with finding a buyer for its voice division – and sources tell us that time is of the essence.
The business comms outfit, which split with CEO David Breith in February after a boardroom bust-up, enlisted Paul Billingham, founder at Knight, last week to manage a “fire sale”.
People close to the matter reckon Knight was given just a fortnight to seek out a buyer. “That tells you all you need to know about the state of finances”, said one contact.
“The business is falling apart. It is completely tragic,” he added.
The backbone of the telco unit is comprised of various acquisitions that Coms made in recent years, including unified comms dealer Actimax, a loss-making entity that cost £3.4m to buy.
The buy-and-build plan dreamed up by ex-boss Breith also led to the purchases of the ICT infrastructure, data centre and smart building solutions subsidiaries at Redstone.
Coms’ revenues grew to £23.1m in the six months to July 2014, up from £2.47m in the same period a year earlier – due to the acquisitions – but it made a loss of £214k versus a loss of £118k.
Breith put together a restructuring plan to counter the losses, but this didn’t yield the expected savings, and in February the board called on a new non-exec director to beef up the finance function.
This led to a series of embarrassing public filings, including Breith calling a general meeting to remove certain directors – a point he later backed down on later the same day. It also emerged that the ex-CEO had bought company shares without telling the board.
A week later, in early March, Breith quit and apologised for buying the shares, and he has since offloaded them. The share price has slumped from more the six pence last May to around a penny.
We asked Coms and Knight Corporate Finance for comment, but neither has responded. ®