Independent report clears way for new owners to take over Quickflix without paying out shareholders
An independent report into the state of the finances of liquidated streaming service Quickflix has highlighted the speed of decline at the company, and concluded shares in it are worthless.
The report, prepared by BDO Corporate Finance, shows the company was operating at a deficit of more than $15m when directors called in the administrators on April 30.
Accounts show the company’s subscription income declined steadily from $18.258m in financial year 2013 to $9.688m as of April 30 this year when the company was put into administration.
It also highlights the $11m in preference shares held by rival streaming service Stan over the company after a deal to buy US giant HBO out of the company in late 2014, which effectively stopped the company from raising more cash to keep going.
The report notes how the company managed to cut costs in the 2016 financial year, in large part thanks to slashing the marketing spend of the company by $3.3m to $1.1m. However it notes how that decision caused the accelerated decline in subscriptions.
Quickflix’s historical balance sheet does not make pretty reading for shareholders
It concludes shares in the company, which have been suspended since August 2015, are worthless, and urges regulators to pass the takeover of US-based Karma Media Holdings.
It says Karma intends to run Quickflix as a service for “niche markets” and “revitalise” the company.
Under its agreement with former directors Karma is paying $1.3m into a pot to help pay off creditors including staff, although it says it intends to keep many of the staff on.
Creditors include major studios which the company used to have distribution deals in place, with unsecured creditors set to get around 21c per dollar owed back.
Karma’s takeover of the company still needs to be ratified by the Supreme Court in WA, which is set to rule on the issue on December 13.
So are you saying that when q.f.x starts trading on the australian stock exchange in february,hopefully,they will be worthless?
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