Destra founder Domenic Carosa has snapped up CommQuest’s prized asset The Bongo Virus, part of Impulse Business Solutions, for $2.35 million, as the struggling digital services company progressively divests its assets in a bid to placate its bank, the ANZ and fulfill debt obligations.
CommQuest shares have been in a voluntary trading suspension since the 25th of March as its executive leadership team continues intensive negotiations with the ANZ to secure continued financial support.
The company has embarked on a swift restructure program, featuring the divestment of most of CommQuest’s assets in a bid to stave off voluntary administration as the company struggles to address the claims of creditors including the ANZ.
The ANZ has agreed to limited financial support for CommQuest subject to a number of conditions including; strict management by the Company of its cash flows; the meeting of timeframes for completion of divestment of specific assets; and a review of the company’s banking facility to be conducted as at 30 June 2009. KPMG has been engaged to assist the company with this process and has been handling the divestment of the assets.
The sale of Impulse Business Solutions to Dominet Digital, Carosa’s digital investment vehicle was finalised today following a competitive bid process. The proceeds of the transaction will go towards reducing CommQuest’s debt with the ANZ.The sale of the asset, comes as a blow to CommQuest founder William Scott who founded the Bongo Virus and had planned to launch it internationally. Up until recently Scott had maintained that only non –performing assets would be sold and was publicly claiming that the Bongo Virus asset was not for sale.
The Bongo Virus, had its genesis as Bongo a question and answer service via SMS which provides a core revenue stream for the group. Scott re-affirmed last month that the company had planned to shed most of its 16 non-performing businesses including the ad agency The Boiler Room, PR group Shac and Pyro Media. He added that there was interest from investors in assets including direct marketing group The Smart group, Next Digital and Infodial although none of thee assets have been sold yet.
Carosa said that he would continue to run the business and brand name as a separate entity and plans to launch the service in the US before the end of the year. It is currently being launched in the UK with a team already on the ground. Carosa said he was attracted to the profitable business due to its model and its international expansion opportunities.
