Two subsidiaries returned to Guvera management

The music streaming company’s creditors range from the ATO and APRA to sponsored sports groups.

Guvera, founded by Claes Loberg, owes the Tax Office more than $10m.

Two subsidiaries of the beleaguered music streaming service Guvera have been returned to Guvera management after creditor meetings yesterday.

“At today’s creditor meetings for Guvera Australia Pty Ltd and Guv Services Pty Ltd, the creditors accepted a deed of company arrangement (DOCA) for each company”, joint voluntary administrator Ezio Senatore said in a statement.

“These DOCAs will provide greater certainty of a return to priority creditors, such as employees, than liquidation of the companies would have done.”

The terms of the arrangement were not disclosed and Guvera did not respond for comment before deadline.

Documents filed with the corporate regulator show Guvera Australia owed about $2m and Guv Services owed more than $10.5m, when the two companies were put into administration in June.

The Tax Office was the single biggest creditor, owed more than $10m by Guv Services, which employed the group’s workers.

Music copyright collection societies APRA and AMCOS, which are run as a single organisation, were together owed more than $900,000 by Guvera Australia, which controlled the licenses needed to run the streaming service.

Phone app developer NextFaze was hard hit, owed more than $462,000, while Melbourne media agency Media Partners was owed $235,000.

Two organisations Guvera sponsored as part of its PR blitz, Tennis Australia and the Melbourne Cup venue Victoria Racing Club, were left owed $285,000 and $297,000 respectively.

Other creditors included Guvera’s former PR firm Edelman, owed almost $34,000.

Last month administrator Neil Cussen of Deloitte told The Australian about 60 employees of Guv Services had been let go but about 20 have been re-employed elsewhere within Guvera.

The firm recently pulled out of the Australian market after a failed attempt to list on the ASX, in a float that would have valued the company at more than $1bn.

Australian users who now try to access the service are instead redirected to a ‘Goodbye’ message.

“Unfortunately, and with a heavy heart, the time has come to pull back from our operations here,” the company says on its website.

“We have decided that in order to achieve sustainable and long-term goals, we will focus our efforts in key emerging countries where we feel we can return the greatest value to our stakeholders.

“As a result, Guvera will no longer stream music in Australia. If your travels take you abroad, you’ll be able re-register to use Guvera in India, Indonesia, Saudi Arabia and United Arab Emirates.”

The company -- which recently lost CEO Darren Herft to co-founder Claes Loberg, who has taken the job on a temporary basis -- has also recently pulled out of several other markets, including the US and Russia.

A memo to investors said shutting the Australian market was linked to changes in its product and a “strategic re-evaluation of the business”.

Guvera’s free business model sees advertisers pay for access to users, offering branded advertising channels with a library of about 60 million songs.