Quickflix Enters Voluntary Administration

PERTH: The Australian SVOD service Quickflix is going into voluntary administration, following failed negotiations with competing platform Stan.

Quickflix appointed partners from Ferrier Hodgson as voluntary administrators. The service says that an “impediment to raising new capital” is the existence of redeemable preference shares (RPS) held by Stan, which is owned by Nine Entertainment and Fairfax Media. These shares were issued to HBO in March 2011 for an investment of A$10 million at the same time that Quickflix entered a commercial relationship with HBO. In July 2014, Nine Entertainment acquired the RPS from HBO for an undisclosed amount.

Stephen Langsford, Quickflix’s founder and CEO, said: “Despite Quickflix being first to the streaming market and holding a leadership position in 2014, ongoing growth has required capital for continued investment in content and marketing. Neither Nine Entertainment nor Stan have ever participated in any capital raisings to assist Quickflix’s growth and its ability to raise capital from any source has been constrained by the RPS.”

Quickflix restructured its business, including being released from more than A$7.5 million in obligations with content providers, and cost-savings across operating and investment areas of over A$5 million per annum. “However, addressing the RPS remains key to securing new investor interest to recapitalize the company and move it forward,” Langsford said. Quickflix had sought to negotiate with Stan to restructure the RPS over an extended period, but Stan said it would only consider this after receiving A$4 million in cash or an amount of A$1.25 million cash plus transfer all of Quickflix streaming customers (both subscription and transactional) to Stan.

“Neither alternative presents a viable option for Quickflix,” said Langsford.

“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.”