Debt chasing outfit Collection House has unveiled a $90 million hit to key assets, as it posted a massive loss and warned the coronavirus pandemic has weakened the amount of cash it is recovering.
The company had not been able to comply with loan covenants and needed to come up with a recapitalisation plan by September, according to accounts released on Tuesday afternoon.
Auditors from KPMG flagged “material uncertainty” about Collection House’s ability to continue as a going concern. But the company’s top brass said plans were afoot to obtain capital and the business had established a “solid foundation” for a sustainable operation.
“We’ve got enough parties [in recapitalisation talks] and we’ve got four months. I’m confident that is enough time to complete a deal,” new chief executive Doug McAlpine
Clouds had been gathering over Brisbane-based Collection House, which uses an online cartoon character called Kash for internet customers to pay back debts, since November last year when then chief executive Anthony Rivas suddenly resigned.
It means for a short period of time, they are in trouble and are desperate to restructure. Now, is the perfect time to challenge and dispute their debts. A triple whammy of Covid, recession and company fallout allow the opportunity.