Danish software company, Milestone Systems, has submitted an application to the Australian corporate regulator to have Hills Limited (ASX:HIL) wound up.
The application was commenced on 11 January and it is set to be heard on 28 February in Queensland.
It should be noted however that an application for a winding up does not mean that a company necessarily has been, or will be, wound up.
The vendor, Milestone Systems, has appointed Bennett and Philip Lawyers, who told ARN they could not comment on the proceedings at this time, but that the issue should be resolved by the end of February.
Hills declined to comment on the matter.
Milestone Systems is a subsidiary of Canon and specialises in IP-based video management software and network video recorders for surveillance.
According to the company's website, the vendor works with 50 resellers and five distributors across Australia, none of which are named as Hills.
The application arrived before Hills finalised the migration of its warehouse operations from a third-party provider to the distributor's new national distribution centre in Seven Hills, New South Wales (NSW), in late January.
As reported by ARN, the move will deliver an annualised operational saving of $1.5 million.
The specialist distributor closed the 2017 financial year with a net loss after tax (NPAT) of $7.9 million, an 88.4 per cent improvement compared to the previous year.
During the past financial year, the business focused on the reduction of costs, outsourcing some administrative functions to Cognizant Worldwide, the integration of Hills Health Solutions into the group and other strategic decisions such as refocusing the company’s direction on vertical industries and growth in health, security and audio visual.
In looking ahead to 2018, major contracts including the provision of a security solution for Perth Stadium, unified Genetec Security Centre solution with AXIS cameras to NSW Parliament House and the supply of a Ruckus solution (station Wi-Fi) to Sydney Trains through Virtual Graffiti stand to have a "positive impact" in the distributor's profitability during the next 12 months, the company said at the time.
In November, Hills told shareholders it was on track to achieve a trading profit in the second half of the 2018 financial year even though it does not expect a return of profit in the first half.