A publicly-listed digital media group, and its five subsidiaries, has been placed in voluntary administration after the corporate regulator applied to wind up the business in the Supreme Court of New South Wales.
Reeltime Media Limited is comprised of a number of digital marketing businesses and the company’s growth strategy was based on acquisitions, buying up digital media and professional services companies on an ongoing basis.
In February, Reeltime presented plans to investors to raise $10 million in capital it said would allow it to complete a number of current and targeted acquisitions that would bring in combined revenues of $50 million and earnings before interest, tax, depreciation and amortisation of $8 million.
At the time the company’s shares were not trading on the ASX, but Reeltime said in an investor presentation it had taken “a number of key steps … for reinstatement to quotation of its securities on ASX”.
But the Australian Securities and Investments Commission filed a winding up order for Reeltime on April 15 and David Ross and Shanon Thomson of Hall Chadwick were appointed administrators of the company on April 21.
The ASIC order also applied the Reeltime Media’s five wholly owned subsidiaries: DE Digital, DE Personnel, Ocean Feather, Paricia and Zaramamma. The five companies are also in voluntary administration.
ASIC said in a statement on Thursday it applied to wind up the business following an investigation into “allegations of corporate governance failures by Reeltime Media over a number of years”.
Following ASIC application, Reeltime informed shareholders the company’s secretary Sophie Karzis resigned on April 16. On April 17, the company told the market director and interim chairman Richard Ochojski had resigned for personal reasons.
The company also released a statement on April 16 informing the market an audit of its financial results for the six months ending December 31, 2014, was being carried out by DFK Richard Hill.
Announcing the appointment of administrators on April 21, Reeltime said a number of “significant, potential investors” had retracted their interest in the company following ASIC’s application.
“This has occurred at a time which was critical to the company’s future given it was undertaking a recapitalisation at the time of being notified of the ASIC application,” Reeltime said.
“As a consequence, the board has concluded that the company may not be able to meet its future obligations and that the appointment of administrators will assist the company to best execute a corporate restructure which may preserve the company as a going concern and therefore maximise the potential return of value to the company’s stakeholders.”
ASIC’s application to wind up the companies will be heard in the NSW Supreme Court in Sydney on May 4.
SmartCompany contacted Hall Chadwick but did not receive a response prior to publication.