Sydney-based Fuel VFX in financial strife
One of Australia’s few world-class visual effects and animation companies, Sydney-based Fuel VFX, has placed itself into voluntary administration due to financial difficulties.
“We have frozen the liabilities of Fuel while a rescue package is prepared,” said Andrew Spring from Jirsch Sutherland Partners, which was this week appointed administrator by Fuel’s five directors.
Fuel most recently worked on Prometheus and The Avengers. Other US feature film credits include Thor, Cowboys & Aliens, Mission Impossible: Ghost Protocol and Iron Man 2.
About half of Fuel’s 80 staff have been stood down, Spring told Screendaily.com. The business and its assets are for sale as a going concern, although it is possible that the company could be restructured and trade out of trouble.
Spring said he has been told by the directors that the company is over resourced, that is, it is geared up for a lot more work than it currently has. In part this has been caused by not reacting quickly enough to delays on some of the projects in the pipeline.
Spring’s own investigation has begun. The eventual outcome needs to be in the best interest of the creditors and the first creditors’ meeting will be held next week, with a second in about five weeks.
“There is not one creditor that has brought down the business,” said Spring in answer to a question about the nature and number of creditors.
Voluntary administration is when an independent person takes full control of a company or business that is insolvent or likely to become insolvent and tries to work out a way to save it. It gives a company breathing space to solve its financial problems – or not.
The three options for creditors are to return the company to the control of the directors, approve a deed of company arrangement through which the company will pay all or part of its debts and then be free of those debts, or wind up the company and appoint a liquidator.
The current board of directors, VFX supervisors Paul Butterworth, Andrew Hellen, Simon Maddison, Dave Morley and executive producer Jason Bath, founded the company in 2000. Indeed, part of Fuel’s appeal is that those who did the work also owned the company. Two and a half years ago new premises were created from a one-time roller skating rink.
Australia has a PDV (post-production, digital and visual effects) offset of 30% that allows international producers to claim a rebate on their local spend but the high Australian dollar has badly affected the country’s competitiveness for PDV and location work.
Australia’s other stand-out VFX companies include Animal Logic, Rising Sun and Iloura.