It might be the end of the road for Buddy Technologies Ltd (ASX: BUD) shares, at least on their ASX path. This company's last traded share price was just 0.6 cents, recorded yesterday afternoon. But Buddy Technologies isn't trading today. And it might not be trading for a while, or perhaps ever again.
This ASX internet of things (IoT) share released an ASX notice this morning. It announced that Buddy Technologies shares will be suspended from ASX quotation "until further announcements in this regard".
Shortly afterwards, the company put out another release. This one confirmed that "Christopher Hill and David McGrath of FTI Consulting were appointed joint and several Receivers and Managers… of Buddy Technologies… pursuant to security held by Partners for Growth VI, L.P ('PFG')".
Here's more of what the release said:
The effect of the appointment is that the Receivers are now in control of the Company's assets, shares in its subsidiaries, undertaking and operations…
In addition, PFG has provided BUD with a limited funding facility to allow the Group to continue to trade in the short term during the receivership period. It is the Receivers' intention to draw down against this facility as and when required and to provide those funds to the Subsidiaries so that day-to-day obligations can be met at that level.
In light of the PFG facility it is the Receivers' expectation that the Subsidiaries will continue to operate on a business-as-usual basis for the immediate future.
Image source: Getty Images
Buddy Technologies shares suspended from ASX as receivers appointed
So this news isn't good for shareholders. It implies the company is under financial stress, with obvious cash flow issues. Going forward, the path is unclear for Buddy Technologies. But here's what the company said would happen next:
The Receivers will shortly commence a process seeking offers for a sale or recapitalisation of the Group… It is anticipated that indicative offers will be sought from interested parties by the week commencing 2 May 2022.
So with that in mind, it looks as though Buddy Technologies will be sold, or at least put out to market. Perhaps a buyer will swoop in and take control of the company. Perhaps an investor will prop it up and the shares will be relisted. Or perhaps it will be broken up. We don't know any more at this stage. But what we do know is that Buddy Technologies shares don't look likely to rejoin the ASX boards anytime soon.
At the company's last traded share price, Buddy Technologies shares have a market capitalisation of $21.07 million. Buddy Technologies is now down 57% in 2022 so far and 85% over the past 12 months.
