MyPages for sale in bid to cut loss
The Nelson-based MyPages phone directory company is likely to be wound up if it cannot be sold.
The directors of the struggling business, which lost heavily on the two top of the south directories it produced in 2010 and 2011, have decided to put it on the market in a last-ditch bid to cut their losses.
Spokesman Geoff Lawes said the venture required more capital if it was to produce another directory or move into web marketing "and the shareholders don't have the appetite for further investment".
As a result, the business would be offered for sale "because we believe we still have something to sell", he said.
If it did not sell by the end of March, it was likely the company - MyPages (2011) Ltd - would be wound up.
Lawes said the decision came as no surprise as it had lost a substantial sum - in excess of six figures - last year, largely as a result of tough economic conditions and aggressive competition.
It had also been affected by an in-house $90,000 fraud committed by former manager Kyle Tahana, who was sentenced to 22 months' jail in September.
Lawes said they had yet to receive any restitution from Tahana.
Lawes maintained the business still had potential as a surprisingly high number of people still used a published directory despite increasing web use. A recent TV poll found that more than 60 per cent wanted a directory, he said.
The venture, which was set up to compete with Yellow Pages, got off to a rough start with founder James Gordon racking up debts of more than $600,000 before closing the doors after a costly court battle with the printer.
The business was relaunched in February last year by Lawes, chief executive of Fico Finance, and other investors, with MyPages 2011 leasing the intellectual property to publish the directory in return for a licensing fee.
However, it too lost money, disappointing unsecured creditors of the original companies who had been promised part payment.
"The original guys were pretty ballsy to take it on and perhaps did it on a too grandiose basis and we thought we could make money out of it and didn't," Lawes said.
Meanwhile, one of the early companies set up by Gordon, MyPages (Top of the South) Ltd, has been placed in liquidation after a successful High Court petition by major creditor Inland Revenue Department.
A spokesman for the liquidators, David Vance and Barry Jordan of Deloitte, said they were still assessing how much the company owed and to whom.
The liquidators would be releasing their first report in a week or two and creditors had until December 18 to file their claims, he said.
- © Fairfax NZ News
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