By Adam Coleman
SYDNEY: WorldAudio founder and director Andrew Thompson has resigned, possibly jeopardising a $90 million rescue plan for the Gerry Harvey backed, renegade radio group.
“There is no ready, willing and able person currently prepared to replace [him],” WorldAudio said in a statement.
Placed in administration on March 21, WorldAudio now has two directors less than the three required for the Corporations Act.
Prior to going into administration, WorldAudio burned through its initial $6.5 million float in 2002, as well as another $8 million raised by the Harvey Norman chairman in 2004, $1.5 million of which was his own money.
Thomson’s resignation came on the same day a document was circulated among creditors outlining the basic details of an agreement with two directors and an unnamed third party to acquire the business.
The deal includes a $10 million raising via a private placement to list the third party into WorldAudio, followed by another $80 million raising, also by way of private placement.
If the deal is approved WorldAudio’s name and management would be changed and it is expected to enable the radio group to pay secured creditors in full and unsecured creditors 10c in the dollar.
The Australian Communications and Media Authority has also made claims some of World Audio’s licences do not meet commercial broadcasting requirements.
After buying a bunch of cheap low-powered AM licences across Australia, WorldAudio attempted to align itself with the large commercial operators with in some cases multi-million dollar licences, when the time came for the Government to grant digital licences.
WorldAudio was counting on the federal Government to allow all radio stations to convert to digital, not only those on the official bands, a move that would have made its signals as strong as its rivals, but the strategy backfired.
Following the company being placed into administration, Gerry Harvey was lighthearted about the situation.
“I have to say 95 per cent of what I buy [sic] made money and 5 per cent didn’t. If you go back X number of years, I’m way in front. But I just don’t like losing,” he said.
“I’m just glad it wasn’t a racehorse, because that would have hurt like buggery.”