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Guvera Cuts Number of Markets in Half Following IPO Rejection

Multinational financial services firm Deloitte has been tapped to lead an international restructuring of the company.

Down-on-its-luck music streaming service Guvera has placed two of its subsidiaries under administration and cut the number of markets where it operates by half as it attempts to bounce back from a rejected IPO from the Australian Securities Exchange (ASX) earlier this month.

On Monday, Guvera confirmed that Guvera Australia and Guv Services, both of which focus on international markets, will be closed and about 30 staff members have been laid off. A spokesman confirmed with ABC News that Guvera would be cutting its markets from 20 to 10, though he insisted the remaining countries account for 90 percent of the service’s users.

Markets of focus will include India, where the company claims to have 6.5 million users, plus Indonesia, the Philippines, the UAE, Vietnam and its home country of Australia. “As we look to focus primarily in key emerging markets, we take with us a highly scalable platform that caters to brands as much as it does for music lovers, artists and rights holders,” said Yemee Fernandes, Guvera’s commercial director for the Asia-Pacific territory.

Guvera Sets Meeting With ASX After Blocked IPO

Multinational financial services firm Deloitte has been tapped to lead an international restructuring of the company.

Guvera execs met with the ASX last week to find out why its proposed $80 million ($58 million USD) IPO was rejected. In a televised interview since that meeting, Guvera CEO Darren Herft said the exchange offered concerns about “the financial capacity of the company in regards to the amount being raised and whether that would be sufficient to meet the company’s objectives.” To date, parent company Guvera Limited has raised $180 million from investors but has been operating with heavy losses ($81 million in 2015; $55.7 million projected for 2016).

Guvera’s Proposed IPO Dubbed ‘Horrifying’; Aussie Streamer Responds to ‘Doubters’

Herft defended the company’s loss-heavy financial strategy as necessary, given the nature of the streaming market.

“Guvera is a far different business model [than others on the ASX], one that requires a significant capital investment,” he said. “There are only a handful of global music companies with digital music streaming rights. None of those companies have spent less than Guvera to establish themselves. So, comparative to the marketplace — the four or five global players, whether they be Apple or Spotify or Deezer — none of those companies have spent less in investing and building the platform for their business. That’s just required if you want to be in this industry.”