Mentor Networks in Receivership

Halifax-based software company Mentor Networks is up for sale. The provincial government has appointed a receiver to sell the company as quickly as possible.

The province made the move because Mentor was running out of cash as a result of slower-than-expected sales. The action was recommended by the private-sector board of directors of the Business Development Corp., the lending agency connected to Economic Development and Tourism. The receiver, Grant Thornton Ltd., took control of the company this morning (July 20).

All of Mentor's 53 Halifax-based employees will keep their jobs.

"This action is in the best interests of the employees, the taxpayers and, ultimately, the business itself," said Manning MacDonald, Minister of Economic Development and Tourism.

"Mentor's greatest assets are in the minds of its people. If the company failed to meet its payroll, we would have faced the prospect of seeing employees walk away. And the future of the company would have walked with them."

Mentor Networks is a developer of interactive educational software. Its products include computer-training packages for Microsoft programs and specialized training programs for the teleservice, hospitality and other industries.

"Mentor has excellent products," said Mr. MacDonald. "Its training software has won international awards, and an independent assessment is very complimentary.

"The problem isn't one of quality. The problem is that Mentor's sales have been too slow in coming. There are several strong prospects for large sales, but the company simply ran out of money. That's why the province moved in."

Mentor relocated to Nova Scotia from Ontario at the end of 1996. The provincial government has invested $5.4 million in the company, including $1 million in shares and close to $4 million in loans. Private investors have contributed more than $14 million to the company, almost three times the provincial government's investment. The province holds the copyright and licenses for Mentor products as security.

"The province is the only secured investor in this company," said Mr. MacDonald. "Taxpayers will be paid first when this business is sold. And I'm pretty confident that the receiver will be able to sell this business to a strong new owner within a few weeks."

jlw July 20, 1998 3 p.m.