ASX-listed video streaming trailblazer Quickflix has entered voluntary administration after it failed to reach an agreement to restructure shares that are owned by rival Stan. Quickflix has appointed Ferrier Hodgson as administrators.
Quickflix, blames Stan and its part-owner Nine Entertainment for its demise. Founder and CEO Stephen Langsford said Stan had imposed conditions on restructuring its shareholding: either Quickflix pay Stan $4 million; or pay $1.25 million cash and hand over its streaming customers, while agreeing to not compete with Stan.
Langsford said “neither proposal presents a viable option” for his company, which recently announced plans to cut 15 percent of its workforce in a bid to save $1 million annually.
Stan is jointly owned by Nine Entertainment and Fairfax Media. It acquired redeemable preference shares in Quickflix, currently worth $11.7 million, from US studio HBO in 2014.
“Despite Quickflix being first to the streaming market and holding a leadership position in 2014, ongoing growth has required capital for continued investment in content and marketing,” Langsford said in a statement to the ASX.
“Neither Nine Entertainment nor Stan have ever participated in any capital raisings to assist Quickflix’s growth and its ability to raise capital from any source has been constrained by the redeemable preference shares,” he said.
“In the first instance Quickflix does not have the funds to make payments to Stan, nor does the company believe it can raise funds from investors for that purpose.”
Quickflix, which once counted News Corp co-chairman Lachlan Murdoch among its investors, has faced tough competition since global streaming giant Netflix entered the Australian market a year ago.
Langsford said he had no alternative but to appoint voluntary administrators as talks with Stan to restructure its holding have broken down.
He added that restructuring Stan’s stake “remains key to securing new investor interest to recapitalise the company and move it forward”.
Langsford founded Quickflix in Perth in 2003 as a DVD home delivery service. Quickflix’s market capitalisation is currently just $2.22 million.
