Regional telco provider Field Solutions Holdings (ASX: FSG) has been placed into receivership just two months after a voluntary suspension of its shares ahead of a planned capital raising of up to $8.6 million to fortify its balance sheet.

The Sydney-based company, which provides telecommunications services to rural, regional and remote communities in NSW, Queensland and Western Australia, has appointed McGrathNicol partners Rob Smith and Matthew Hutton as receivers and managers and voluntary administrators to take control of the business.

The delay last month in progressing the capital raise, which was targeting between $6 million and $8.6 million from cornerstone investors, triggered technical defaults with Field Solutions’ senior lenders and “certain material creditors”.

“Control of the group now rests with the receivers who intend to continue to trade on a business-as-usual basis whilst they pursue going-concern sale options or a recapitalisation through the voluntary administration process,” says the company in a statement to the ASX today.

Field Solutions, which operates the Field Solutions, TasmaNet, ANT Communications and IP Transit brands, recently offloaded its wholesale NBN business and in January said it had received a non-binding term sheet for the divestment of its mining business unit in a bid to ease its debt burden.

The company yesterday announced that the mining business was sold for $4.975 million, with $1.975 million of this subject to performance conditions.

The sale will see 80 customers and 21 staff transition to the undisclosed buyer, with the disposal leading to a $4.8 million cut in annual operating expenses and $12 million in gross revenue for the group.

Field Solutions says the sale of the mining unit is consistent with its strategy of reducing its revenue concentration and high-capex project risk.

The Field Solutions receivership follows a strong performance by the group in FY24 as revenue lifted 13 per cent to $63.43 million, leading to a 5 per cent increase in EBITDA to $5.39 million.

In January, the company reported another positive performance with customer receipts of $13.95 million in the December quarter and positive operating cashflow of $1.68 million.

However, the capital-intensive business invested $2.71 million on its regional network as well as property, plant and equipment during the quarter.

Field Solutions secured a $13 million debt facility in December 2023 on an 18-month term to provide working capital and support delivery of the company’s infrastructure development projects.

The company had borrowings of $12.24 million at the end of June last year as the debt facility, and government grants, have been used to fund network infrastructure in the group’s Regional Access Network.

Field Solutions says the receivers are currently preparing to undertake a sale and recapitalisation of the group, and this is anticipated will lead to a deed of company arrangement being proposed to creditors.

Prior to their suspension, shares in Field Solutions last traded at 2.2c each, which valued the company at $17 million.

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