Quickflix says HBO remains committed to the company
Troubled DVD rental house Quickflix has explicitly denied The Weekend Financial Review’s claim that major investor HBO could force the company to repay a $10 million investment by the end of the year.
Quickflix, which is in the midst of a cost-cutting restructure after facing a severe cash shortfall, said the AFR article’s claim that a recent board exodus constituted a liquidation event, giving HBO the right to redeem funds within 40 days of the departures, was wrong.
“Recent changes to the Quickflix board do not constitute a liquidation event and the company confirms it has since received HBO’s acknowledgment that even if such a right existed that it would not enforce it,” Quickflix said in a statement to the Australian Securities Exchange. “Quickflix confirms that the board and management have the full support of its investor HBO to execute the restructuring plan already advised to the ASX in an announcement made on 29 November 2012.”
Quickflix’s statement that HBO remains committed follows the unexpected resignation of HBO-nominated director Henry McGee on November 16 while the company was in a trading halt and expecting to announce a new investor and capital raising. On November 20, deputy chairman Justin Milne and non-executive director Susan Milne resigned (although Milne stayed on as company secretary), along with Quickflix’s chief executive Chris Taylor, who is set to be replaced by executive chairman Stephen Langsford in March 2013.
Quickflix posted a $13.97 million net loss in fiscal 2012 as it invested heavily in its fledgling digital rental service although it has said that capital expenditure will now be reduced as it returns to a focus on subscriber and revenue growth.
At the company’s annual general meeting on November 30, shareholders posted a significant 28.1 per cent vote against adopting the remuneration report as well as a 22.2 per cent vote against a resolution to approve the possible issue of a further 10 per cent of issued capital. However, all resolutions were passed.
Corporate lawyer David Sanders joined the board following the AGM.
The company has yet to announce a new strategic investor and expects to provide further information about its funding arrangements this week.