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Adcorp has placed it subsidiary, allaboutXpert Australia (aaX), in voluntary administration, following "considerable losses on contracts" at the company.
aaX is a project management firm, which contributed less than 2% of the Adcorp group’s half-year revenue. The Adcorp group operates in Australia and South Africa.
On Wednesday, the group said that aaX suffered "considerable losses" on contracts which required extensive investment to remediate.
Adcorp failed to find potential buyers for the business, and after taking legal advice, has placed the company in voluntary administration.
Glenn Livingstone and Alan Walker of WLP Restructuring have been appointed as joined administrators to aaX.
Adcorp insists that aaX forms a negligible part of the Adcorp group as their contribution to group revenue is small. However, in a summary of interim financial results release in October, Adcorp said that its "overall results were negatively impacted by problems in the allaboutXpert".
Adcorp Holdings Australia "remains both solvent and liquid and its continuing operations are unaffected by this development. The voluntary administration process will aim to maximise the chances of preserving the business of aaX and optimise the return for its creditors and shareholders," the company said.
Adcorp's share price was virtually unchanged following the announcement on Wednesday. Its shares have lost almost 4% of their value this year.
