Joneses' liquidation put down to cash shortage

Monday 18 February 2008

Real estate company The Joneses has placed itself into voluntary liquidation after being unable to raise the cash it needed to list on the sharemarket.

By The Landlord

COMMENT: The Joneses gone by lunchtime

The company, which rebelled against industry convention by charging sellers a fixed-fee rather than commission, has appointed Auckland liquidator Meltzer, Mason & Heath.

Liquidator Mike Lamacraft said the company had been short by about $600-700,000 and the directors had been responsible and "made the right decision".

He hoped to have a report out by the end of the week.

The main creditor was the company's holding entity, TJRE Holdings.

Earlier today The Joneses called off plans to list on the sharemarket's alternative board by backing into listed entity RLV.

Under the proposal RLV No.3 was to buy all the shares in The Joneses for $13.75 million.

Today the company told vendors said it would work "with urgency" to ensure property listings were transferred to another agency of their choice.

The Joneses promised to revolutionise the real estate industry, with the flat fee being cheaper in many cases for vendors than paying a commission-based agency.

Director Chris Taylor told Radio New Zealand he still believed in the flat-fee concept, but"the fact is, we didn't have the cash to continue to get to the volume that was required."

Volatility in capital markets had left the company unable to raise new capital, and without the listing, there was not enough cashflow to continue trading.

Taylor said The Joneses was always honest about its financial situation.

"There's never been any secrets...we're a young company, we hadn't broken even and that was completely out in the public arena.

"We started this process pre-Christmas and the initial response that we had from the investment community and brokers at that point was extremely positive...

"The fundamentals of this business haven't changed, what's changed is the investment market and the caution with which investors are using with their investments at the moment."

COMMENT: The Joneses gone by lunchtime

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