Spike Australia, one of the last bastions of the dot-com era, placed itself in voluntary administration this week after a bid to secure $5.8 million in funding failed to eventuate.
A lifeline had been thrown by Grant Greentree, a shareholder of ailing Web services company Peakhour, but on Tuesday Greentree announced he was not prepared to provide funds to Spike ahead of his subscription for shares in the company.
The $5.8 million-worth of funding was hoped to give Spike the necessary working capital to see it through its intended merger with ASX-listed Spike Networks, which has a 44 per cent stake in the company.
Spike also attempted to garner funds through existing shareholders Spike Networks and Hong Kong-based venture capital firm techpacific.com (no affiliation with distributor Tech Pacific), which is the majority shareholder of Spike Limited, owning 56 per cent equity of the holding company for the Spike Group .
Both shareholders declined to provide additional funds and Spike was forced to call in administrators Peter Walker and Max Donnelly of Ferrier Hodgson.
"We are working to ensure that Spike continues as a going concern. We are in discussions with several interested parties to secure investment in Spike as an on-going business, including our current staff and activities," Peter Williamson, Spike Australia CEO, said in a prepared statement.
A spokesperson for Spike told ARN the company expects to have a clearer idea about its future by the middle of next week after administrators have had a chance to review the company's operations. The once high-flying Spike now generates the bulk of its flagging revenues through Web development and multimedia projects.
The fate of the company's 120-odd staff is uncertain, who returned to work after hearing the news of the company's administration late Wednesday evening, according to sources in contact with ARN.
Administrator Ferrier Hodgson is also in discussions with Spike Limited over the financial position of its other subsidiaries in Hong Kong, Singapore and Tokyo, which continue trading.