Digital service provider Hyro has settled almost $20 million of outstanding debt following a $4 million rights issue this month.
After being “hit pretty hard” by the economic downturn late last decade, the ASX-listed company anticipated posting a positive net asset position in its next annual report for the first time.
As of last June, Hyro owed the Australian Taxation Office (ATO) $11.4 million in deferred tax payments (pdf). Chairman Robert Clarke said the debt dated back to 2006-07, when it was incurred “under previous management”.
Hyro had a payment plan with the ATO since February 2009. It expected to be in the black by the end of this week after reaching a final settlement of $2.26 million.
It also reached a $1.2 million settlement for another $8.5 million owed for now-defunct subsidiaries – Flouro, One Planet Solutions, and Hyro Services – earlier this month (pdf).
“That’s the first time in Hyro’s history that we’ve had a positive net asset position on the balance sheet,” Clarke told iTnews.
“We’ve been wanting to pay [the tax bill] off sooner, but due to operating restrictions in the business, we weren’t able to do it.”
Clarke attributed a bulk of Hyro’s economic downturn woes to the collapse of financier Lehman Brothers in September 2008.
The company was now close to finalising the issue of almost a million new shares to eligible shareholders at $0.002 a share, and expected to report a positive net asset position of $1.4 million in its Annual Report next month.
Prior to the rights issue announced on 8 March, Hyro had 663,000,000 ordinary shares and 48,000,000 options on issue at $0.007 a share.
Looking forward, Clarke expected Hyro’s silver lining to come from a growing interest in cloud computing among State and Federal government agencies, and enterprises.
He highlighted Hyro’s identity and access management software, Idaptive, which was deployed in a number of government departments in Australia and New Zealand last year.
“When utilising the cloud, security and access management is absolutely imperative,” Clarke said, noting that Hyro was currently in private negotiations with government departments and financial institutions.
“We really do sit in a very attractive niche in a vibrant and attractive industry,” he said.