When Oakville, Ont.-based telecommunications service provider Cannect Communications announced last February it would be going into receivership, analysts predicted there would be more Canadian competitive local exchange carriers (CLECs) to follow down the same path.
They were right.
Cannect first ran into some problems after unsuccessfully trying for an initial public offering (IPO). It then experienced a failed attempt to merge with Toronto-based Axxent Inc. So, without much else for it to do, the company announced it was going into receivership, and fell off the Canadian CLEC wagon.
Then just last month, another announcement made its way across the news wires: another Canadian start-up, this time Mississauga, Ont.-based C1 Communications, was in trouble and was seeking bankruptcy protection. Although the company was not available for comment at the time, it said in a release that it “filed an application to and received from the Ontario Superior Court of Justice an order granting the company protection pursuant to the provisions of the Companies’ Creditor Arrangement Act (CCAA).”
This, according to the release, would enable the company to maintain its customer service commitments while it had the opportunity to explore its options, including restructuring, sale or liquidation.
The company also said it had “taken this action as a result of the current turmoil in the financial markets.”
Fast-forward a few weeks to mid-April: Axxent makes a similar announcement. The company revealed in a statement that although it had cash and cash equivalents estimated to be sufficient to fund the company until this month, it did not have the means to continue beyond that time frame.
At press time, no one from the company was willing to speak with Network World Canada.