Rodgers Reidy Success Stories: iflix Sdn. Bhd
In December 2020, the Rodgers Reidy Malaysia Office ended an undoubtedly challenging year due to the restriction and lockdown attributed to Covid-19 pandemic by successfully implementing and facilitating a Corporate Voluntary Arrangement (“CVA”) for iflix Sdn. Bhd (“iflix MY”).
Iflix MY is part of the iflix Group that provided free and subscription video on demand services focused on emerging markets to consumers via its site which served as a digital hosting and distribution platform for Western, Asian Regional and Local TV shows and movies obtained through partnerships with various studios and content distributors globally.
The streaming service was available to consumers across Asia including in Malaysia, the Philippines, Thailand, Indonesia, Sri Lanka, Brunei, the Maldives, Pakistan, Vietnam, Myanmar, Cambodia, Nepal, and Bangladesh.
Iflix MY’s revenue was mainly derived from subscription services and the sale of advertisements on the iflix Group platform.
The issues faced by Iflix MY:
a) The bulk of the subscription revenue was derived from business-to-business partnerships with telco providers which arrangement expired and not renewed, thus lowering revenue
b) High costs to acquire relevant content for customers;
c) Various regional competitors operate to offer a viable alternative to consumers; and
d) Change of sale model to offer consumers free access in view of earning advertisement revenue, however, advertising sales did not scale quickly enough.
Based on available record, we are pleased to advise that Iflix MY is the third Company in Malaysia to have applied for CVA since the introduction under the Companies Act 2016 as form of rescue mechanism for distressed companies. Spearheaded by Rodgers Reidy Malaysia Managing Partner, Lim Tian Huat and Directors Alex Chiang and Evonne Khoo, the CVA of iflix with over 400 creditors worldwide was conducted by the way of a fully virtual creditors’ meeting and implemented over a tight timeline of twenty eight (28) days.
We are proud to announce that the proposed voluntary arrangement received an overwhelming approval of over the requisite 75% at the creditors meeting, and the arrangement will allow creditors of iflix MY to maximize their return and represent an orderly distribution of the proceeds of iflix MY to the creditors.
A massive congratulation to the team at Rodgers Reidy Malaysia Office, and everyone else who contributed to the success of the CVA including Ernst & Young Turnaround and Restructuring Strategy Team and Messrs. Chooi & Co. + Cheang & Ariff.
For any advice pertaining to potential insolvency and restructuring options available to distressed businesses in Malaysia, please contact Alex Chiang or Evonne Khoo of our Rodgers Reidy Malaysia Office.