Senetas Investment Comes To Nothing As Dataease Winds Up
Sydney Morning Herald
Monday May 14, 2001
Database software maker DataEase will be liquidated, bringing to an end one of the worst investments by listed dot com incubator Senetas.
The liquidation follows Senetas's offer last week to buy back another of its struggling companies, 3D software maker Kusp, which was spun off in a $10 million float last year only three months after it was set up.
As recently as six months ago, the Senetas board had shown its confidence in Melbourne-based DataEase. The database company's revenue rose 32 per cent in the last financial year, according to Senetas's 2000 annual report. In September, Senetas paid $437,500 to increase its stake from 30 per cent to 57 per cent.
Not much more than six months later it was placed in voluntary administration. Senetas announced on April 4 that DataEase had been placed in the care of insolvency specialist Bent & Cougle.
DataEase collapsed under debts of more than $600,000 because of ``the non-payment of a major debtor, past projects not being completed or not satisfactorily completed, and previous mismanagement," said Bent & Cougle's manager, Mr Hamish MacKinnon.
``It was quite a difficult business to sell. We did advertise it but had only one person show any interest. There was an initial offer which was very low and at that stage we didn't have much to sell."
Creditors including the National Australia Bank voted on Tuesday to place the company in liquidation.
DataEase had just $2,200 left in the bank and $15,000 worth of office equipment. It was also owed $178,000 which was proving difficult to recover, Mr MacKinnon said.
The NAB, Senetas and DataEase's 20 employees were the biggest losers. As a secured creditor, the NAB was likely to recover about a third of its $97,000 debt. Staff were unlikely to receive redundancy payouts or $71,000 in other entitlements. Senetas was unlikely to recover $362,500 in loans.
Discounting DataEase which has already disappeared from the portfolio list on Senetas's Web site the former Diamond miner has stakes in 11 high-tech plays.
Senetas now plans to split into two divisions: a venture capital vehicle containing the 11 remaining development investments and an operating group focused on generating positive cash flow.
This second group would be formed around a new acquisition: 12-year-old Melbourne data management business, Datum Group, which will be purchased for $10.1 million in cash and shares.
Senetas's chairman, Mr Francis Galbally, hopes the new structure will deliver Senetas's first EBIT profit within the 2002 financial year.
© 2001 Sydney Morning Herald
Share This