Smart loses battle with ComReg
As firm is sold for €1
Smart Telecom has lost its High Court battle with ComReg, with the court ruling that the troubled telecoms firm should not have been offered a 3G mobile licence.
The ruling from Justice Peter Kelly states that the regulator was right to withdraw the offer of the 3G licence from Smart. The offer of the licence was withdrawn early this year on the back of issues surrounding the €100m bond to be paid by Smart.
Smart Telecom has acknowledged the decision from the High Court but has yet to give any comment. "We have received today's ruling by the High Court. We now need to reflect on it and consult with our legal advisors," the company said in a statement.
"ComReg welcomes today's judgement, which confirms that ComReg's original decision was correct, and that it followed fair and correct procedures. ComReg believes that it has been vindicated by the court," the regulator's chairperson Isolde Goggin said in a statement.
The ruling comes as Smart Telecom shareholders voted to approve the sale of the troubled telecoms firm to a Brendan Murtagh-owned company for €1. Shareholder approval for the sale came at the firm's extraordinary general meeting (EGM) on Tuesday.
The decision means that Calally Limited, a company controlled by Murtagh, will acquire the assets of Smart for €1 and assume Smart's estimated €40m liabilities. In exchange Smart will receive a 10 per cent shareholding in Calally.
Smart CEO Ciaran Casey has welcomed the decision of shareholders and added that "while we accept that the disposal represents a very disappointing outcome for all shareholders, it is the only option to ensure that shareholders have an opportunity to get some value for their investment. It also means that the long-term future of the business can be assured, creditors will be paid in full, employment for staff secured and services to the company's customers be maintained".
In order to manage payment to creditors, Casey said the company is currently working on a detailed payment plan. "All debts will be discharged in full in a reasonable timeframe. We very much appreciate the patience shown by suppliers in supporting Smart through this difficult period," said Casey.
This should come as welcome news to the Smart Creditors Action Group (SCAG), which on Tuesday called on Smart to ensure payment takes place promptly.
"Ciaran Casey made a clear public statement of commitment at today's EGM and we hope that he will follow this through as soon as possible with a detailed payment schedule. The Smart Creditors Action Group now represents over 30 Smart Telecom creditors and all are anxious to have their outstanding debts cleared," said Martin Ferris of Ferris & Associates, chairperson of SCAG.
SCAG was established in the past two weeks in a bid to ensure that all outstanding creditors of Smart are remunerated. The group will act like a Creditors Committee of Inspection in a liquidation situation. Over 30 creditors attended the inaugural meeting of SCAG last week and a second meeting will take place in the coming weeks.
Looking ahead Casey said Smart will focus on its residential and corporate broadband and data services. He said in the last few weeks Smart has retained over 90 per cent of its residential broadband customers and claims to have also signed additional contracts with corporate customers for data services.
As for the situation Smart found itself in last month, with over 40,000 of its customers left without voice services, Casey said management and the board take full responsibility and are not looking to blame anyone. However, he went on to say that government needs to "reassess how the market is operating if companies are to compete more effectively and if the benefits of competitively priced broadband services are to be made available to Irish residential and corporate customers".
Copyright © 2006, ENN
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