Rescue bid to prop up IT Media collapses

By SIMON HENDERY

Wilson Neill's publishing subsidiary, IT Media, has been placed in receivership after a bid to put together a group-wide refinancing package for the troubled company collapsed.

Broking firm DF Mainland had been working on the package, but principal Stuart Cairns said yesterday it could not go ahead.

"We had progressed to the point of having funds in place. However, after extensive due diligence, which has just been completed, we regrettably found that we were unable to proceed," Mr Cairns said.

Wilson Neill and DF Mainland were looking at an alternative arrangement, he said.

Grant Graham of Ferrier Hodgson said he was appointed as IT Media receiver on Wednesday night.

He said he was preparing the company's two remaining big assets fishing and rugby magazines for sale.

The receivership was instigated by Elders Finance, owned by entrepreneur Eric Watson and property developer Mark Hotchin, which has a $1 million debenture over IT Media.

IT Media founder and managing director Tim Connell quit the company on Tuesday, citing unhappiness with the direction and management of Wilson Neill.

After backing IT Media into Wilson Neill last year, Mr Connell spent a short time as the parent company's group managing director.

He remains a major Wilson Neill shareholder.

Wilson Neill last week reported a $24 million loss for the 15 months to last June and is facing several legal claims from creditors.

IT Media is believed to have lost more than $1 million last year through its business magazine, the NZ Business Times, which folded last month.

Its e-tailing sites, FlyingPig and CDStar, also collapsed last year, with other internet ventures the company established.

Wilson Neill chairman Trevor Mason and group managing director Phil Vosper said yesterday that IT Media had been a significant drain on the company's resources for some time.

It had accounted for a "considerable portion" of the loss reported last week.

"Despite the fact that a lot of effort went into trying to resuscitate the loss-making asset including the closure of FlyingPig, NZ Business Times and CDStar in the end, IT Media was simply unsustainable," Mr Mason and Mr Vosper said.

"Directors could no longer justify it being financially supported by the rest of the group."

IT Media's remaining publications are NZ Rugby World and NZ Fishing World.

Last year the company won a contract to publish a regular magazine for giant supermarket company Foodtown.

Mr Graham said yesterday he was unsure about the status of that contract.

Wilson Neill shares, which trade on the unlisted market, hit a record low of 0.2c yesterday.