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Business News Digital
Guvera puts two subsidiaries into administration following IPO block
By Chris Cooke | Published on Monday 27 June 2016
Following the news last week that Guvera’s plans to IPO had been blocked by the stock exchange on which it wished to float, the Australian streaming music firm has now put two of its subsidiary companies into administration.
According to ABC, the two companies now in administration – Guvera Australia and Guv Services – are involved in the firm’s international business. A spokesperson for the company has confirmed that the streaming service has now bailed on ten of the markets in which it operated, but insisted that 90% of its users were in the ten countries where it is still live. It’s not clear which suppliers will be affected by the closure of the two subsidiary businesses.
Insisting that the company would continue to operate beyond its home market of Australia, Guvera’s Commercial Director Asia-Pacific, Yemee Fernandes, told reporters: “As we look to focus primarily in key emerging markets, we take with us a highly scalable platform that caters to brands as much as it does for music lovers, artists and rights holders. We offer our product in markets where smartphone adoption is growing rapidly alongside digital mobile advertising spends”.
As previously reported, many in the Australian investor community were critical of the prospectus Guvera issued when it announced it was floating on the Australian Securities Exchange, saying that the company’s high debts and low revenues made it a very unattractive proposition. The digital music business amended its proposals, but the ASX still took the pretty much unprecedented step of blocking the flotation.
Given the figures in its prospectus, and the setback of the blocked IPO, there has been much speculation as to whether or not Guvera can now survive as a going concern. The streaming firm will be hoping that by shutting down certain subsidiaries the parent company can continue operating.
