Administrators say Antra, led by Raymond Petty, propped up start-up funder Fundsquire

Creditors owed millions have voted to keep Antra Group alive despite administrators saying it propped up Fundsquire through a series of undocumented loans.

Fundsquire founder and CEO Damien Petty. Source: Supplied.

Creditors of collapsed financier Antra Group – some of whom are owed more than $1m – have voted to keep the company alive, despite a recommendation from administrators that it be wound up.

Antra, led by Raymond Petty, propped up Melbourne start-up funder Fundsquire – where Mr Petty’s son Damien is a director – through a series of undocumented loans, according to administrators Jonathon Keenan and Peter Krejci of BRI Ferrier.

Mr Keenan and Mr Krejci said in order for a deal to repay creditors, proposed by Raymond Petty, to be successful, the value of the Fundsquire business needed to increase from zero, as it is currently, to between $63m to $115m.

“This increase in value could theoretically be possible however, according to the limited information and documents provided, the administrators were unable to form a positive view that this increase there would be reasonably likely,” the administrators wrote in a report to creditors.

“The administrators were not convinced that (Damien Petty) had capacity to meet the … payment obligations (under the deal) given the limited information provided on the Fundsquire business and lack of financial information on the proponents.”

Antra Group owed creditors up to $37m when it entered administration in September 2022, including $20m worth of undocumented loans from Mr Petty to his son, who abruptly stood down all Fundsquire staff last month.

Fundsquire, which had 54 employees around the world and some two dozen in Australia, provided loans to start-ups and SMEs through early access to their R&D tax credit payments.

As first revealed by The Australian in December, the Melbourne-based company left start-ups and small businesses in the lurch when it stood down staff and cancelled loan agreements.

Antra’s creditors voted against liquidation at a meeting in December in the hope that the Fundsquire business can survive and repay its debts to Antra. Minutes from the meeting show more than 70 creditors are owed money with six owed more than $1m.

“We recommend that creditors resolve to wind up the company, as we have not been provided sufficient information to determine that the (deed of company arrangement) will achieve its objectives,” the administrators said in their report.

“There is a lot of information that was not provided. In some cases, we were advised that the information was not available, in other cases there were no meaningful responses provided.

“The absence of information or considered explanations on the circumstances, leads us to necessarily have a sceptical mindset when forming views and making recommendations for creditors, particularly where there are substantial creditor claims and corresponding impaired related party debtors.”

While creditors approved the deed in a vote, multiple creditors who spoke to The Australian on condition of anonymity said they were pessimistic about seeing any return on their investments.

“I’m not expecting to see any of it back,” one creditor said.

Under the agreement, Antra creditors will receive a share of five payments worth millions of dollars each over eight years, and creditors must not take any legal action against the company.

As The Australian previously reported, Antra had minimal capital reserves for a financier, its administrators found, instead funding its operations through debt. The company borrowed funds from creditors in the aim of making a profit on the differential on interest and fees earned, while minimising losses from bad debts.

Melbourne’s Mitchell Asset Management has provided a lifeline to start-ups and small businesses relying on Fundsquire’s loans, last month acquiring the failed local lender’s Australian and Canadian loan books totalling $50m, while Fundsquire’s UK loan books have been acquired by London-based online lending platform Sprk Capital.

Fundsquire is not itself in administration and Damien Petty, its chief executive, is in talks with a potential buyer for the business.

But some Antra creditors expressed optimism the business could survive under a restructure. Damien and Raymond Petty declined requests for comment.

“We’re stabilising things. Fundsquire was a large part of the ecosystem and (its collapse) obviously has ramifications, but we’ve stepped into the breach,” Mitchell Asset Management chief executive John Mitchell said in an interview in December.

“We’re well experienced, we’re a good, safe pair of hands, and we’re open for business. We’re here to take their calls and nothing need change other than the person that you speak to on the end of the phone.”