Tuesday 25 October 2016 09:03 AM
Wynyard calls in administrators after giving up on $10M shareholder loan
By Paul McBeth
Oct. 25 (BusinessDesk) - Wynyard Group's board has appointed voluntary administrators after the intelligence software developer gave up on drawing a $10 million loan from major shareholder Skipton Building Society or trying to raise new capital.
KordaMentha's Neale Jackson and Grant Graham have been appointed administrators, which Wynyard's board says will "ensure an environment where all options can be fully explored to retain the value in the business," it said in a statement. Auckland-based Wynyard halted trading in its shares while it investigated ways to tap a standby loan facility with Skipton, however it today said that drawing down the loan or raising new debt or equity wasn't "in the best interests of the company, its shareholders or other stakeholders."
The one-year facility, secured over the assets of the company, included arrangement and commitment fees, drawdown fees of 8 percent, and an annual interest rate of 15 percent on any amount drawn down. Skipton imposed restrictions on the facility including a test that the board is confident that the company "can enter into transactions sufficient to repay any amount drawn down under the facility" and tied the funds to meeting certain financial covenants.
Last week Wynyard said it needed to make a partial drawdown on that facility in early November and was looking at how it could meet the conditions of the loan.
"The board acknowledges the significance of its decision for shareholders, staff and customers, and will work with KordaMentha to support these parties as it moves quickly through this process," it said today. "At this point, Wynyard will be making no further comment on the voluntary administration process."
The shares last traded at 21.5 cents, having plunged 88 percent so far this year as the software developer burned through cash and struggled to deliver on revenue guidance.