‘Tech for good’ FinTech GoodBox has agreed on a restructuring plan to rescue the firm from administration.
The plan was approved by the courts following a meeting earlier this month with creditors, which means the firm is now formally out of administration.
It says it is now able to focus on supporting fundraising efforts for not-for-profits across the UK.
Since its inception in 2016, GoodBox has supported the charity sector by providing charities with a range of digital fundraising tools and contactless technology.
To date, it has implemented thousands of devices across the UK and raised millions for charities.
GoodBox says that the vast majority of its clients have continued to trade with the firm during the administration period. These include The Pret Foundation, The Natural History Museum, The Church of England, National Portrait Gallery and Muscular Dystrophy UK.
The company has been able to continue to trade with no disruption during the administration period, and the new agreed solution will allow the company to work with and support current and new clients.
“We are delighted to have agreed a restructuring plan for GoodBox and are looking forward to focussing on supporting not for profits across the UK,” said GoodBox CEO David White.
“The firm has some exciting plans and thanks to the agreement we are able to start implementing these to secure the future of the company.”
The Part 26A Restructuring Plan was proposed by NGI Systems, a tech vendor of GoodBox, and is understood to be the first of its kind outside of London.
It will see GoodBox’s debt burden of more than £10m being slashed by more than 90%.
The sanctioned plan will save the £4.5m of taxpayer funds provided to GoodBox in January 2021 via the UK Government Future Fund, a scheme designed to support innovative UK businesses during the pandemic and operated by the British Business Bank on behalf of the Government. The Bank will retain equity in the company and a share of future revenue as intended.
The latest hearing followed a vote by existing shareholders and creditors which saw administrators from Frost Group once again oppose the rescue package, having previously had their efforts to sell the business blocked by the court.
The court criticised the submissions of the administrators and ordered them to fall in line to accept the plan on behalf of the company. It also dismissed their separate application to sell the business and ordered them to pay the legal costs of NGI Systems in the matter.
The only substantial creditor voting against the plan was the British Business Bank, even though the alternative of a fire sale of assets would have wiped out all creditors and shareholders of GoodBox.
The sale of the business would also have likely meant that there would have been no technology continuity for GoodBox’s existing clients, a point that the Church of England formally raised with the administrators ahead of the hearing.
However, with more than 90% of the remaining shareholders’ and creditors’ votes cast in favour of the plan, it was able to be sanctioned by His Honour Judge Davis-White KC, sitting in the Business and Property Court in Leeds on 16 January 2023.
Tibor Barna, a founding partner at NGI Systems and co-founder of GoodBox, welcomed the decision of the court. “We are pleased that the court has again ruled in our favour, confirming our belief that the rescue plan backed by 20 new investors is the best route forward for the company and its clients, under the control of the new independent board of directors.
“It was disappointing that the Future Fund, via its director Luis Martin, acted in a manner that represented neither the interest of the taxpayer nor the mission and mandate of the Future Fund, which was to support the companies they invested in to save them from collapse during COVID.”
This article has been amended following initial publication to include further detail of the rescue plan and shareholder vote.