Former Dick Smith Owner Goes After SIM Seller Amaysim
Anchorage Capital the Company that made millions from the acquisition of the ill-fated Dick Smith retail operation is now having a crack at trying to buy Amaysim the struggling mobile retailer whose share price jumped 10% yesterday according to insiders.
With Dick Smith the operation went belly up with debts of over $400M now the venture capital Company is looking to buy, turn around and on sell the struggling Amaysim who last year bailed out from selling grey imported smartphones.
Amaysim’s share price soared yesterday soared following its acquisition of a small mobile retailer Jeenee for $7.8 million along with rumours that Anchorage Capital has been running the ruler over the local SIM seller.
Amaysim has struggled during past two years as other competitors including Kogan, Aldi and Woolworth stripped customers with similar mobile offers. They also abandoned attempts to sell mobile smartphones which ChannelNews identified as being not being certified for the Australian market.
They also stopped reselling the NBN’s notoriously unprofitable plans altogether, saying it couldn’t make any money out of that side of the business.
This added downward pressure on earnings.
The acquisition of Jenee will boost Amaysim’s mobile subscriber base by 41,700 customers, bringing its total subscriber base to almost 700,000.
Chief executive Peter O’Connell cancelled a scheduled media interview yesterday following revelations that Anchorage Capital was interest in the company.
In a prepared statement, Mr O’Connell said of the Jeenee deal: “The acquisition of Jeenee is a financially and strategically attractive opportunity that allows Amaysim to leverage its revitalised Optus NSA and operating structure to increase shareholder value.
“This acquisition further adds to our growing mobile subscriber base, executing on our strategic pillar to grow the mobile business and cement our position as the leading MVNO (mobile virtual network operator).
“Jeenee has a high-quality subscriber base and we look forward to welcoming its customers to the Amaysim Group and providing them with our outstanding customer service.”
Amaysim has been battered over the past two years by nightmare conditions in both the mobile and broadband markets. A year ago, it stopped reselling the NBN’s notoriously unprofitable plans altogether, saying it couldn’t make any money out of that side of the business.
Another problem for the small telco was their foray into energy retail, through the acquisition of Click Energy, has been hampered by what the company claimed is the “single biggest period of regulatory change since the sector was de-regulated”.
In August, the company posted a full-year loss of $7.8 million. Chief executive Peter O’Connell said the company’s poor year could be blamed on market conditions, and that those conditions had started to improve.
“We’re ready to really grow the business over the next few years. It was a reset year, and we held our own and reset the business,” he said.