Squeeze forces Swiftcall into liquidation
TELECOMS provider Swiftcall has gone into liquidation, creating uncertainty for hundreds of its customers.
A liquidation meeting will be held in Dublin on July 14. While Swiftcall boasted it had 8,500 customers, it is believed that just a few hundred are on fixed-line contracts. The vast majority buy products such as sim cards from the company. It is thought the business could be sold on as a going concern.
Founded by entrepreneur Tom McCabe back in 1991, Swiftcall was initially selling tens of millions of euro worth of international phone call cards every year.
Mr McCabe subsequently sold the business to Japanese firm KDD in 1998 for just €630,000. KDD also assumed about €30m in debt. Swiftcall had faced severe headwinds prior to the sale after a new switching system in the United States proved incompatible with Swiftcall's.
However, the Irish management, led by chief executive Tommy Tuite and chief technology officer Fergus Kernan, bought out the firm in 2006.
Mr McCabe then returned as executive chairman and an investor in the company, taking a 55pc stake. Mr Tuite and Mr Kernan each owned 15pc. John Hynes, a co-founder of telecoms firm Ninetel which Swiftcall acquired in 2007, owned the remaining 15pc. The management buyout reportedly valued Swiftcall at €6m.
At the time he reinvested in Swiftcall, Mr McCabe said he planned to embark on a €60m fundraising for the business.
Latest accounts show that in the year to the end of March 2009, Swiftcall made a loss of almost €34,000 on turnover of €1.36m. The previous year it had recorded a loss of €628,000 on turnover of €1.03m. It had an accumulated loss of €482,000 at the end of March 2009. Its directors were paid a total of €142,000 in that period. Mr Kernan, Mr Hynes and Mr Tuite had each loaned the company €30,000 on which the firm was paying 12pc interest.
Last October, O2 said it would terminate a service that enabled Swiftcall customers to make cheaper calls to the O2 network from landlines.