Renewable energy electricity retailer Jackgreen has entered voluntary administration, allegedly due to financial difficulties incurred during a heat wave occurring on the NSW eastern seaboard. Atle Crowe-Maxwell of PKF has confirmed he and colleague John Lord have been appointed as voluntary administrators for the company, but Jackgreen would not return calls for comment.
A statement from Crowe-Maxwell and Lord is expected to be made this afternoon.
Jackgreen was served with a court application at the request of state government-owned Integral Energy Australia earlier this month, saying the company should be wound up on the basis of an alleged failure to pay an outstanding $808,983.
Apparently the money was owed due to the on-the-spot purchase of energy during NSW’s November heat wave, when Jackgreen was forced to buy electricity at higher prices. The company has about 70,000 residential customers, who are now expected to move to competing retailers.
While Jackgreen said earlier this month it would defend the application, and was in the process of talking with financiers, a statement lodged with the ASX suggests its appointment of voluntary administrators comes as a result of the court action.
“The action to appoint a voluntary administrator followed Integral Energy Australia Limited’s application to wind up JGL in the NSW Supreme Court. Despite the Company’s attempt to recapitalise JGL, the company was unable to reach an agreement with Integral, and accordingly the Directors of JGL, have resolved to place the Company into voluntary administration.”
The company was hoping to obtain funding of between $3-5 million, but failed to achieve a recapitalisation. Shares have been suspended in the company, last trading at 3.8c.
The move comes after the company raised $2.8 million through a raising earlier this month, with $1.2 million placed in convertible notes and $1.6 million in shares. Chairman Greg Martin said at the time the company’s prudential requirements had increased due to volatility in the wholesale electricity market.
This volatility was highlighted in the company’s most recent financial results, when it reported a $7.1 million loss for the six months to 30 June 2009 following a $3.3 million loss for the six months to December 2008.
Most recently, the company announced Andrew Randall would step down from his role as managing director and hold an advisory position, with the firm set to search for a new chief executive.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
