Gizmondo Europe apply for administration
If you’ve followed our coverage in the past you’ll be aware of the roller coaster ride that has been the Gizmondo story. I say ‘has’ as it looks like the ride is finally coming to the end with the company applying for administration to protect itself from creditors.
The Gizmondo unit, on paper, always looked to be a class piece of kit and even the original delay of some six months from initial launch until we saw units on the street could be accepted as usual for a new piece of technology. But from then on the Gizmondo story seemed to go from bad to worse... with what's believed to be frankly piss poor distribution from launch, which was rectified with several high street retailer deals (though availability still seemed suspect) and then the now legendary Gizmondo Financial Report, with its directors seeming to authorise company buy-outs and take-overs, and various suprising payments to wives and partners, including company cars, all of which made for very worrying reading should you be a shareholder.
Well if you are a shareholder, it appears you’ve now got even more to worry about, as Gizmondo Europe, seemingly in an effort to seek protection from its creditors, has applied to the High Court for administration. Tiger Telematics, the parent company for Gizmondo, says that 50% of the staff have been laid off in an effort to reduce the payroll whilst the company restructures.
Gizmondo Europe has been given even more cash in the form of a $5 million USD bridge loan in an effort to help it restructure its debts. Recently it was announced that Gizmondo had to find a further $75 million USD in funding, or repay a debt of $21 million USD to two shareholders, or lose its rights to the SmartAds system that Gizmondo utilizes to deliver content to the handhelds.
All in all, Gizmondo Europe’s finances appear have been in a worrying freefall for the last few years, with steadily mounting losses being announced each year; $99 million USD for 2004 and, at the time of the financial report, a staggering $210 million USD just for the first half of 2005! So today’s revelations hardly come as much of a surprise. What remains to be seen is whether the American based company, Gizmondo USA, and perhaps even Tiger Telematics itself, are able to distance themselves from the ‘troubles’ Gizmondo Europe are suffering.