Queensland music streaming startup Guvera has entered two of its subsidiaries into voluntary administration after its $1.3 billion initial public offering was blocked by the ASX.
In a statement, the company said it had appointed Deloitte to lead an “international restructure” and its subsidiary entities Guvera Australia Pty Ltd and Guv Services Ptd Ltd had been placed into voluntary administration.
“Guvera intends to continue to operate in its home market of Australia and will dedicate its focus, in the short term, on the high growth emerging markets of India and Indonesia,” the company said.
Guvera said in a statement a “strategic review” of the company was completed last week.
“A key outcome of this review is that Guvera must restructure its operations in order to optimally position Guvera to achieve its future strategic objectives,” the company said.
The company said it will “work closely” with Deloitte to provide financial assistance for creditors of the subsidiaries placed into administration.
A large majority of the $80 million that was planned to be raised through the IPO would have been used to repay debt and creditors.
Guvera’s attempted IPO was heavily criticised by tech entrepreneurs and investors, with the prospectus revealing the company had revenue of $1.2 million for the 2015 financial year and net losses of more than $80 million.
In the first half of 2016 the company had net losses of $55.7 million.
Atlassian co-founder Mike Cannon-Brookes said he was “terrified” by Guvera’s IPO, while Seek co-founder Paul Bassat said early-stage listings like this are an “absolute disgrace”.
Just a day after an updated prospectus was approved by the Australian Securities and Investments Commission, the Australian Securities Exchange blocked Guvera’s IPO, putting the startup’s future in serious doubt.
While the reason behind this decision remains confidential, the ASX said in a statement it has “absolute discretion” to not admit a company to the exchange.
“In exercising its discretion, ASX takes into account the principles on which the listing rules are based, which services the interests of companies and investors in maintaining the reputation of the ASX market,” the ASX said.
“These principles include that an entity should satisfy appropriate minimum standards of quality, size and operations and disclose sufficient information about itself before it is admitted to the official list.”