Sustained low prices for memory and accounting issues within the company have compelled memory distributor Australasian Memory to go into voluntary administration.
New Zealand manager Colleen McArthur says rumours of Australasian Memory going under are wrong.
“I don’t know why anyone would say that,” she says.
At the company’s head office in Sydney, Australasian Memory’s board of directors has appointed chartered accountants Richard Brien and Steve Nichols of Richard Brien and Co as joint administrators under section 436A of Australia’s Corporations Law.
The appointment of an administrator is not the same as a liquidator — the administrator sorts out a company’s affairs and is generally seen as a way to stave off creditors from starting receivership proceedings. At a creditors’ meeting in Sydney on February 21 attendees were given the opportunity to remove the administrators and replace them with their own nominee if they wished.
Until the second meeting of creditors Australasian Memory is under the control of the administrators, who are solely responsible for authorising supplies or credit in the meantime. The purpose of the appointment of joint administrators is to help AM with financial matters, leading to a restructuring this month.
Australasian Memory was restructured only late last year, leading to job losses in both Australia and New Zealand. However, managing director Barry Amor says staff will not be laid off, nor will any branches close as a result of the current restructuring.
The company has not revealed the amount or severity of its debt to creditors, but reliable sources estimate the company owes almost $A6 million, with the largest amounts owing to Kingston Technology and Digital. A second meeting of creditors is expected in about three weeks. This could involve the company being wound up, the administrators being removed or the company entering into a deed of company arrangement. The administrators are expected to report back to creditors on their options before the second meeting.
Amor says once the current arrangements with creditors are settled, the company will move to replace its “old financier” with a new one. Amor says an injection of venture capital to the tune of $A4 million will then be invested in the new AM by a company he would not name, referring to it only as a “reputable capital firm”. Amor says the investor is considering an initial $A2 million capital injection, followed by an additional $A2 million at a “later stage”.
With memory sales contributing some 50% to Australasian Memory’s overall business, it is no wonder their falling price — from around $US140 per 4Mb over a year ago and now $US17 per 4Mb — played a part in the company’s financial difficulties.