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Live by the sword: Debt collector Collection House pushed into administration

Business

Debt collection company Collection House has collapsed and appointed voluntary administrators as it suspended its shares from trading on the ASX.

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FT Consulting’s John Park, Ben Campbell and Kelly Trenfied have moved in as administrators of the company that has struggled to keep its head above water since Covid severely impacted its business model.

The Brisbane-based debt collection company recently boasted of being “largely debt free” but it plunged $8.5 million into neobank Volt which this week announced it had stopped taking deposits and would hand back its banking licence.

It is not yet known if the Volt investment was a major factor in Collection House’s problems.

Collection House shares went into a trading halt immediately after the Volt announcement and this morning it announced its suspension from trade followed by the appointment of administrators.

Its quarterly update in April reported a subdued market and it had also been impacted by floods and continued pandemic restrictions. It also had negative cash flow of $4.2 million and it was forced to dip into capital reserves.

It said it was confident of steady improvements to services and revenue.

FTI could not shed any light on the company’s position. A creditors’ meeting was expected to be held within eight business days of the

The company has been on life support for some time. It was suspended from trading on the ASX for much of 2020 when it breached its loan covenants and struck problems refinancing its debt. It re-emerged on Christmas Eve of that year with a new plan, but its share price collapsed by about 60 per cent after investors chose to get out rather than wait for the company’s promise of a recovery.

Its shares last traded at 6.8 cents.

 

 

 

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