Zylotech administrator winds up future projects

The directors of Australian IP security surveillance manufacturer, Zylotech, have discharged their responsibilities to the company's administrator.

The company's CEO, Dai-Kyu Kim and chairman Peter Granger said they would to "render" all assistance to the company's administrator.

Zylotech was placed in voluntary administration under section 436A of the Corporations Act, on 24 August.

Andrew Needham, administrator from HLB Mann Judd, told CRN that Kim continued to be employed "to assist" him with the administration process.

Since taking over, Needham said, the Administrators' had to make the "unfortunate" decision to terminate the majority of the company's employees.

He said they have undertaken a review of Zylotech's works in progress, sales pipeline and committed future projects.

"There were a number of quotes and tenders for projects that would have possibly commenced in 2010," he said. "The parties [involved with] those contracts were still uncommitted [and] in my opinion the company didn't have the financial resources to pursue those opportunities. 

"On the balance of probabilities those projects wouldn't have generated sufficient margin to enable  [Zylotech] to restructure its operations even if the company's creditors agreed to such a lengthy moratorium." 

Needham said the company's current work-in-progress involved the manufacture and delivery of hardware technology and was being completed "as much as possible".

The company also continued to receive and supply in-stock hardware to its resellers, he said.

Needham said Zylotech has received numerous expressions of interest for the purchase of its business and technology assets.

Recapitalisation of the company was also put up as an option.

"One or both of these options was now the most likely outcome(s) to the Administration process," he said.

If matters were sufficiently resolved by next week, Needham said, he would tender his recommendations in a report to creditors on the 17th of September.

A meeting would be held seven days later to decide the outcome.

"If not, then I would seek the committee's view on applying to Court for the period to hold the second creditor's meeting of the Administration, extended by a period of time," he said.

Needham said a committee of creditors has been formed to assist the Administrators. 

The committee comprises of; Multi Vendor Support Services Pty Ltd; Sayed Maher Magrabi; Zylotech's ex-CEO - Nick Sikiotis; Accounting for IT; and Dai-Kyu Kim.