Embattled Australian subscription on-demand service Quickflix has entered into administration.
The Australian Securities Exchange-listed company has appointed partners from Ferrier Hodgson as voluntary administrators, though trading continues as usual. Quickflix’s New Zealand arm is not included in the administration process.
Quickflix said it had taken the move as its struggled to raise new capital due to “the existence of redeemable preference shares [RPS]” held by rival SVOD platform Stan, which had been a “a significant disincentive for new investors”.
In an announcement to investors, Quickflix CEO Stephen Langsford also accused Stan and Nine of participating in capital fundraising efforts.
Stan acquired the RPS – which are ranked above regular shareholdings – when its co-parent Nine Entertainment Co. bought them from US premium cable operator HBO, which had invested A$10 million (US$7.7 million) into the Quickflix in March 2011.
Langsford claimed the value of Stan’s RPS stood at around A$11.7 million, and added that it was “not in a position to fund [their] redemption”.
The company said Stan, which Nine operates with Fairfax Media, had demanded Quickflix pay A$4 million to redeem the shares or A$1.2 5million plus all SVOD and TVOD customers and an agreement to not compete in future.
“As these negotiations with Stan have not been successful and the majority of potential new funders have specified the restructure of the RPS as a condition of providing capital, the company has no other realistic alternative but to appoint voluntary administrators,” it added.
Quickflix’s management still plans to restructure the business, and said it would be “business as usual”.
Stan couldn’t be contacted for comment before press time, but it has declined to respond to various Australian media outlets.
Quickflix, which began life as a DVD distributor, had led the SVOD market in Australian until 2014, but was negatively effected by the launch of well-financed rivals such as Stan, Presto and Netflix. A deal to distribute Presto content in August failed to stick, while further M&A moves did not materialise.
The news comes after another Australian on-demand platform, Ezyflix, shuttered in August last year.