Perth-based cloud services provider Fast Hit is trying to strike a deal to save the company after being slapped with a winding-up order from the Australian Taxation Office.
Simon Coad was appointed administrator for the 12-year-old business late last month.
In the minutes of the first creditors meeting, Fast Hit's managing director, Christopher Bauer, blamed financial setbacks after Fast Hit "entered into significant loss-making contracts" with clients including Western Australia’s Water Corporation and the Department of Health.
Fast Hit had also fallen behind in lodging Business Activity Statements to the ATO, and been in arrears with the tax office for some time – "despite a repayment plans and ongoing negotiations with [the] ATO, they have commenced winding-up proceeding", according to the creditors' report.
The ATO has become increasingly aggressive in chasing unpaid taxes this year, with a high number of insolvencies predicted in 2015.
Fast Hit is hoping to avoid the wind-up via a possible acquisition by another Perth-based IT service provider, Silverain.
They are proposing an agreement that would protect Fast Hit's 800 clients and allow the company to continue operating under Silverain’s ownership, providing a better return to creditors.
Bauer told CRN he expects minimal downtime during the transition period, and the company will operate as usual if an acquisition is successful.
“We’ve put in a huge amount of work to minimise disruption for our clients, and in fact, we expect very little or no change for most of our customers,” said Bauer.
“The brand will stay the same; our fantastic staff will stay on. I’ll be working to ensure everything goes smoothly, but if anything, our current proposal will breathe a new life into the business, which I’m quite excited about.”
Fast Hit has been struggling with ATO debt for some time, but has returned to positive cash flow with additional supply contracts and cost-cutting measures, according to the creditors report.
A meeting to decide the company’s future is scheduled for 1 September.
Founded in 2003, Fast Hit has more than 800 clients, with operations in major data centres in Sydney and Perth including Vocus, NextDC and Global Switch.