Fairlight In Administration

Thursday, 13 March 2003

Fairlight ESP is in administration after becoming unable to meeet ongoing financial obligations. The Australian company was placed in the hands of Giles Woodgate and Co late on Wednesday March 12th.

Fairlight employed over 40 people at their Australian HQ, located in Forestville. The firm had revenues in excess of A$20 million last year. Fully owned by Fairlight Japan, at this time only the Australian company is affected. No overseas subsiduary companies are in administration, according to general manager Greg Sampson.

Administrator Giles Woodgate is in control of the firm. Staff salaries were only guaranteed until Wednesday night, whereafter the administrator faced the decision of how many people to rehire under the administration. This depended on available cashflow.

On Friday 14 March, all but several staff were stood down. Mr. Woodgate confirmed the company has a lot of inventory - but mainly as components, not goods made up. "There are significant intercompany debts", he stated, adding that some could be disputed.

The move into administartion came when Fairlight Japan, controlled by ultimate Fairlight owner Kenji Fukuda, withdrew funding. It is understood SoftBank, a venture capital company, in turn withdrew funding from Mr. Fukuda's firm, creating a sudden crisis.

Fairlight staff are anxiously awaiting Mr. Woodgate's next move, which is to sell the plant, then the intellectual property - but it appears he is not totally confident. The company occupies leasehold premises and has little in the way of finished goods for immediate sale. Plus the outstanding accounts owing are in part tied to other Fairlight entities outside the six companies now in Mr. Woodgate's control.

Overseas subsiduaries of Fairlight are still operating, and are not within Mr. Woodgate's administration. General Manager Greg Sampson confirmed a frantic effort was being made to save the long established, well regarded manufacturer of audio post equipment.

"I am as busy as a one legged man in an arse kiccking competition" he told me on Thursday. "We are working on obtaining money (funding) from a secondary source", he stated.

Mr. Sampson remains at the premises, assisting Mr. Woodgate's staff and preparing assets for auction. The firm was put into administration because it could not meet current financial obligations.

The move came following a meeting of the directors in Sydney. The Managing Director is David Hannay. "It's a sad day", I said to Giles Woodgate last week. "Yes, it's not a good one", he replied.

The outcome may see the brand sold, with several parties said to be interested in acquiring the intellectual property - in the same manner Fairlight did, when fellow Australian post audio manufacturer DSP (who made 'Postation') went into liquidation last year.

Julius Grafton
www.juliusmedia.com