Guvera’s Dreams Crumble: ASX Says ‘No-Way’ On IPO
The dreams of major loss-making music streaming company Guvera of raising $100 million – and a possible valuation of up to $1.4 billion – via a share float on the Australian Securities Exchange have been shattered after the ASX on Friday announced it had rejected Guvera’s planned IPO.
The decision is tipped to lead to an explosion of anger by clients of accounting firms who were urged to invest in Guvera by AMMA Private Equity, a Queensland based company in which Darren Herft , co-founder and chief executive of Guvera, is also a co-founder and director.
Said an ASX spokesman at the weekend: “ASX has exercised its discretion to refuse admission, based on material contained in Guvera’s application for admission. Specific reasons remain confidential …
“ASX must be satisfied that a company is appropriate to be listed on ASX and can exercise its discretion to refuse admission, even where a company otherwise satisfies all of the specific conditions for admission.”
The ASX said principles on which its decisions are based “include that an entity should satisfy appropriate minimum standards of quality, size and operations, and disclose sufficient information about itself before it is admitted to the official list.”
Guvera said in a media statement that it is reviewing its legal options and will offer more information to the market when it is more informed. It noted that the ASX has offered a meeting this week to discuss its decision.
As revealed in CDN and other publications in recent weeks, the Gold Coast-based streaming service has shown little in the way of assets while accruing a significant string of hefty losses.
Guvera posted a loss of $55.7 million for the first half of 2016 and losses for the first nine months of financial 2016 of about $80m million.
A number of high-profile investors, including Atlassian co-founder Mike Cannon-Brookes and the Australian Shareholders Association have criticised the business model of the Gold Coast-based company in recent weeks.
If approved and fully taken up, the ASX float would have seen founder Claes Loberg score shares possibly valued at up to $144 million, with another $98 million in shares going to Darren Herft.