Neobank Volt enters solvent liquidation as wind down continues

Neobank Volt enters solvent liquidation as wind down continues

Volt Bank co-founder Steve Weston.

Numerous entities affiliated with failed neobank Volt have entered solvent liquidation with expectations all creditors will be paid in full over the course of a wind-down process that could take another year.

Founded in 2017, Volt rose to prominence as one of several challenger banks promising better customer service based on the underpinnings of advanced financial technology, raising $219 million over its lifetime including a $100 million Series E in 2021 with participation from the Australian Financial Group.

But in June last year the company revealed it could not secure the funding required to continue, and Volt encouraged all customers to withdraw their funds.

"With regret, we are announcing that Volt will be closing its deposit-taking business and intends to return its banking licence,” Volt stated at the time.

“Following the pandemic and the current challenging global economic climate we were unable to secure the funding needed to continue. Our priority now is to ensure account holder funds are returned to account holders as soon as possible.

“Volt will start closing accounts from the 5th of July 2022 so please ensure you have withdrawn all your funds to leave a balance of $0 in all accounts before then.”

The wind down has been a slow but 'orderly' process, culminating in the appointment late last week of Grant Thornton partner Said Jahani as liquidator for BAAS Technology Limited and its associated entities, formerly known as Volt Corporation Limited.

"The group has been undergoing an orderly wind down of its business over the past 12-18 months after ceasing operations and returning its banking licence to APRA (Australian Prudential Regulation Authority) in September 2022," Grant Thornton states.

The group has now entered into a solvent liquidation which is the final step in the wind down process. The process allows a solvent company to wind up its affairs and distribute its assets to its shareholders, with all creditors paid in full.

The liquidator is intending to engage with several interested parties regarding the sale of the group’s remaining assets, being its intellectual property.

"We estimate that the timeline to the finalisation of the liquidation to be 12 months. This is highly dependent on the receipt of tax clearances from the statutory bodies," Jahani says.

The company will be automatically deregistered three months after lodgment of the final forms with the Australian Securities and Investments Commission (ASIC).
 

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