Zylotech administrator: The company is salvageable
- 26 August, 2009 12:23
- Comments 2
Plagued by scandals and financial woes, ASX-listed IP-security vendor, Zylotech (ASX: ZYL), has gone into administration. But the outlook is not too grim, according to the company’s administrator.
A business restructure early in the year has failed to resuscitate the flagging company and Zylotech entered into voluntary administration under the Corporations Act on August 20 after discussions with its accountant.
Zylotech administrator, Andrew Needham of HLB Mann Judd, will be working through the company’s order books to discern whether the vendor can deliver the goods as well as finding ways to tweak orders to extract greater value out of them. He will also look at possible routes to make cost reductions, an important step since, according to ASX records, Zylotech was burning cash it didn’t have.
Needham said it was unlikely the company would be liquidated since there was an intrinsic value in the listed entity.
“I think Zylotech will be restructured or sold off in some way,” Needham said. Results will be out in six weeks time.
For the vendor’s former employees, secure and general creditors, chances are they will receive all their money, Needham said, but he was unsure whether shareholders would have the same luck.
“It depends on if I can resurrect the company,” he said.
Needham was optimistic about Zylotech’s chances. He highlighted his past experiences with the now defunct Open Telecommunications, which he managed to bring back from the brink.
Avnet, which became Zylotech’s first and only Australian distributor in December last year, terminated the partnership just five months ago. Avnet general manager, Gavin Lawless, said he saw the writings on the wall. He cited well-publicised scandals including the departure of Zylotech’s CEO due to breaching terms of employment and significant board shuffles as reasons the two companies parted ways.
“It became clear that as an organisation, it was struggling both in leadership direction and financially at that time, so we made the decision to stop our work with them pretty much before we even started,” Lawless said.
Come socialise with us! Facebook | LinkedIn
- Bookmark this page
- Share this article
- Got more on this story? Email ARN
- Follow ARN on twitter
- Premier Media Group Fast Study
- Red Light In the Control Centre Saves Hours of Chaos
- Spectra Logic and Australian National University Success Story - March 2012
- In Search of the Long-Term Archiving Solution —Tape Delivers Significant TCO Advantage over Disk
- In Search of the Long-Term Archiving Solution —Tape Continues to Be a Major Player
-
Tech Watch: Who watches the datacentre?
-
Preview: HTC One S
-
Facebook scammers host Trojan horse extensions on the Chrome Web Store
-
Webroot: Growth in security
-
Sice quits Acronis, joins Staples
Get exclusive access to ARN's news, research and invitation only events. 
Comments
Anonymous
Zylotech
It is never smart to cater for just top end clients.
That is the biggest mistake of Zylotech. How many Airports, Shopping Centers, Ports do we have? A similir Company in New Zealand (Swiftlink Ltd) went bust a few years ago. Good luck to and I hope they get out of administration.
Rob
White knight falls on sword
Malcom Fraser Clay and Deancorp!! How much damage did this coup do to our company and for what reason? When I saw the funding offer made by Deancorp to "save" Zylotech, my only thoughts were Rip-off. Will Deancorp be one of the secure or general creditors who get all the money back? And what happened to the White Knight plan? Forcing our company to burn money or rollover made me very uncomfortable. And now it's almost over. I would want to see what the White Knights get out of this compared to the shareholders who only recently topped up the cash reserve on the promise of better times ahead.
Post new comment