Guvera seeks cash as administrator called in

The stricken music-streaming service hopes to raise up to $20m from local and overseas investors.

Guvera CEO Darren Herft. Picture: Luke Marsden.

Stricken music-streaming service Guvera hopes to raise between $15 million and $20m from local and overseas investors over the next fortnight in a last-ditch bid to keep the group alive after it put two subsidiaries into administration.

About $180m pumped into Guvera by 3000 investors is already at risk after the ASX knocked back the loss-making Gold Coast-based group’s listing application.

The stock exchange listing would have valued Guvera, which lost $55m in the second half of last year, at more than $1bn.

Creditors of subsidiaries Guvera Australia and Guv Services, which Guvera handed over to administrators Neil Cussen and Ezio Sentatore of Deloitte on Monday, will meet on July 7 in Paramatta, a Deloitte spokesman said.

About 30 staff employed by the companies were laid off on Monday, but Guvera said that “a large portion of employees have been offered employment with another entity in order to continue servicing parent company Guvera Limited”.

“All legal entitlements will be paid,” chief financial officer Ken Hostland said.

Figures on Guvera Australia and Guv Services’ debts were not available from Deloitte or Guvera but they are believed to owe millions of dollars to creditors including copyright collection society APRA AMCOS and the Taxation Office.

Guvera’s prospectus shows the company is also mired in litigation carrying a potential liability of about $25m, made up of a £10m lawsuit brought by British employees of a failed subsidiary and a $6.9m stoush with former director Michael De Vere.

It is believed Guvera, led by Gold Coast entrepreneur Darren Herft, hopes to liquidate the two companies and continue operating the rest of the business.

Guvera’s shareholder registry shows that in April Tree Pot, a company controlled by Kate Kantor, owned 39 million shares, or about 3 per cent of the company.

Pomegranate Nominees, also controlled by Kate Kantor, is recorded as owning an additional 10 million shares.

Ms Kantor, who could not be reached, is the daughter of Rupert Murdoch’s sister, Anne. Mr Murdoch is the executive chairman of The Australian.

Holdings by Guvera directors including Mr Herft and founder Claes Loberg dominate the registry, with the bulk of the remainder apparently made up by self-managed super funds investing on behalf of investors introduced to the company by Mr Herft’s AMMA Private Equity.

Over the past eight years AMMA has reaped more than $20m in fees for its fundraising efforts — part of a string of related-party deals, including loans and a deal to develop a new head office, disclosed in the prospectus.

The company told would-be investors its directors believed the deals “are on commercial terms”.

“However, there is a risk that these arrangements may be deemed by a court not to have been entered into on commercial terms,” it said in the prospectus.

Speaking to ABC TV on Friday, Mr Herft said no commissions had been paid to AMMA’s network of accountants.

“Under the corporations act that’s prohibited,” he said.