Australian SME lender Axsesstoday has announced it is entering voluntary administration.
The company made the decision after its senior lenders informed Axsesstoday that they could no longer support the business with ongoing waivers of breaches of loan terms.
“Axsesstoday’s business has grown significantly over the past three years, placing pressure on the capital structure of the business. This, coupled with higher arrears than anticipated, has resulted in breaches of financial covenants with its lenders and a capital structure that is inadequate for the business and its continued growth,” said a company statement, according to an April 12 report in My Business.
“The directors sought a voluntary suspension from its listing on the ASX [Australian Securities Exchange] in September while they undertook a review of the business and sought to raise capital to enable the group to, amongst other things, comply with the terms of its finance documents and set itself for future growth,” the statement added.
Last year, Axsesstoday revealed to the ASX that a change in its bad debt provisioning methodology, as well as an increase to its impairment recognition, had “inadvertently triggered a breach of its financial covenants” with its senior lenders. In addition, changes to the company's corporate structure were approved without the banks' consent, while $2 million in funding “in business loans through one of these new entities” was secured outside agreed terms.
Despite its entry into administration, Administrator Vaughan Strawbridge said “it is business as usual and we expect there will be strong interest from onshore and offshore investors. We will achieve a recapitalisation or sale and will continue to work with the group’s financial advisers, Moelis Australia, to ensure a positive outcome.”
Strawbridge added, “The voluntary administration process will allow greater flexibility for the restructure of Axsesstoday and seek to ensure the future of the business in the Australian asset-based lending market.”