Microwave backhaul specialist DragonWave delisted from from TSX and NASDAQ; board of director resigns
Once a significant player in the microwave backhaul space, Ottawa, Canada-based company DragonWave has effectively shutdown, with the Ontario Superior Court of Justice placing a financial receiver in charge of the firm’s “property, assets and undertakings.”
Let’s take a look back at how this quickly unfolded:
On July 20, lenders Comerica Bank and Export Development Canada demanded repayments of $17.2 million, along with a “notice of intention to enforce the security,” with a 10-day timeline.
According to company statements, at the time, “DragonWave continues to pursue alternative financing; however, there is no assurance that the Corporation will be successful in securing such financing.”
The following day, DragonWave distributed a press release noting it “is in negotiations with potential sources of alternative financing to address the repayment demand and notice of intention to enforce security…There is no assurance that the Corporation will be successful in securing alternative financing on terms that will satisfy its lenders, or at all.”
On July 28, the lenders asked an Ottawa court to appoint KSV Kofman Inc. as the company’s receiver. According to press materials, “The secured lenders have expressed their intention to pursue a short, court-supervised sale process conducted by the receiver to attract interested purchasers or investors in an effort to maximize value for the lenders and other stakeholders.”
That same day, the Toronto Stock Exchange put the company on notice that it was reviewing delisting criteria, and suspended trading of the shares. On the U.S. side, the Nasdaq informed the company it would be delisted on Aug. 2.
The court appointed KSV Kofman Inc. as receiver on July 31. The following day, Aug. 1, board of directors members Peter Allen, Claude Haw, Cesar Cesaratto and Lori O’Neill tendered their resignations effective immediately.
DragonWave’s product portfolio is focused on point-to-point packet microwave solutions for IP networks with an emphasis on small cell networks. To that point, in October last year, DragonWave said it was working with Sprint in support of the U.S. carriers small cell deployments.
In a piece titled “DragonWave’s road through hell,” James Bagnall of the Ottawa Citizen describes the key drivers of the company’s downfall as Nokia’s acquisition of Alcatel-Lucent, which was a major competitor, effectively killing more than half of DragonWave’s sales. Further, a “technical glitch” prompted a halt in shipments to a customer in India.
“Two seismic events,” Bagnall wrote “…stripped DragonWave of 60% of its annual revenues in just two years.
