Jobs slashed and two subsidiaries in administration as Gold Coast’s Guvera hits new low note

GOLD Coast music streaming service Guvera has been forced to place two subsidiaries into voluntary administration and cut 60 staff after the ASX blocked its replacement prospectus.

Darren Herft, Guvera CEO. Two subsidiaries of the Gold Coast music streaming service have gone into voluntary administration.

GOLD Coast music streaming service Guvera hit another low note, forced to place two subsidiaries into voluntary administration and cut 60 staff after its replacement prospectus was blocked by the ASX.

The fresh blow comes after Guvera spent the past week hitting up new investors for funds and speaking with its 3000 shareholders at roadshows in Melbourne, Sydney and Brisbane.

The company said Deloitte has been appointed to lead a global restructure as well as administer subsidiaries Guvera Australia and Guv Services.

The companies, two of 12 Guvera subsidiaries, handled Guvera’s international business.

Guvera said it will work closely with Deloitte to provide financial assistance for creditors of the two entities.

Guvera said it “continues to operate in its home market of Australia and will dedicate its focus, in the short term, on the high growth emerging markets of India and Indonesia as well as the United Arab Emirates, with a longer term objective of investigating opportunities in the Philippines and Vietnam”.

The latest setback for the Robina-based company comes after its replacement prospectus was blocked by the ASX earlier this month despite being given the green light by the Australian Securities and Investments Commission.

Guvera also copped heavy criticism over its cash burn, debt level, related party deals and business model underlying its planned $1.3 billion float, most notably from Atlassian co-founder Mike Cannon-Brookes.

The tech billionaire said he was ‘terrified’ by the original prospectus after receiving a pitch to invest in the company and later welcomed the ASX decision to block Guvera’s listing.

Guvera made only $1.2 million in revenue and an $81 million loss in the 2015 financial year.

According to its revised prospectus, it 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 $80 million. At the end of last year, the company had a negative asset position of $27.4 million.

However, the embattled company, which raised $185 million from 3000 shareholders, via AMMA Private Equity and its network of accounting firms, told the Gold Coast Bulletin it refuses to give up and is set to reveal it has received fresh funds from major new and existing shareholders.

A spokesman said Guvera had scaled back its global focus from 20 to 10 markets, is shoring up capital, will gain a refund from the ASX of more than $350,000 and will soon receive a research and development grant of up to $7 million.

Guvera chief executive Darren Herft is also a director and co-owner of AMMA.