Iconic Australian company goes out of business as market share is devoured by Chinese competitors
- The Aussie company Hills goes bankrupt after a court defeat
- The maker of the Hills Hoist had a net loss of $23.9 million in 2022
One of Australia’s best-known companies has gone into receivership after losing a lawsuit with a $5.48 million payout.
Hills, the company behind the iconic Hills Hoist washing line, went into receivership Friday afternoon.
Shares of the company last traded at 2.3 cents, valuing the company at just $12.3 million.
Hills was founded in 1945 by Lance Hill, who invented the iconic Hills Hoist washing line in Adelaide and revolutionized the way laundry was dried outdoors.
The company continued to diversify over the years, producing TV antennas, auto parts, electronic security and healthcare technology.
In 2000, the company had sales of more than $1 billion, but at the end of the March 2023 quarter, the company had a cash balance of $2.8 million after a loss of $23.9 million in 2022.
The company had hit hard times after struggling to compete with Chinese companies that now dominate the manufacturing sector.
The last nail in the coffin for the company was a lawsuit after it got out of hand with supplier Stellar Vision Operators over contractual matters.
The lawsuit was originally dismissed in 2022, but after an appeal from Stellar, the decision was overturned and a $5.48 million payout was due May 18.
Following the decision, Hills requested that its shares be suspended while it negotiated with Stellar about next steps.
Hills said they were “looking for a voluntary suspension pending resolution and an announcement by the company regarding ongoing settlement negotiations between the parties and other stakeholders, including the funder, which, if not resolved satisfactorily, could become a could have a significant impact on the company’s financial condition.
The company that made the iconic Hills Hoist clothesline (pictured) has gone into receivership after a court ruled that Hills must pay more than $5 million to Stellar Vision Operation, putting the company under
Hills was founded in 1945 by Lance Hill, who manufactured the Hills Hoist and from there grew the company into a manufacturing giant
Hills chief executive David Clarke said the outcome was “incredibly disappointing.”
“This is not an outcome we ever envisioned, especially after our successful capital raise in April, which brought a new cornerstone investor on board and, we believed, set up Hills for long-term success,” said Mr. Clarke.
“It is incredibly disappointing to see the company placed into receivership as a result of a landmark legal action over a transaction that long predates the current management and board of directors and has never had any impact on the company’s operations.
Our consistent legal advice was that this legal claim would ultimately be resolved in Hills’ favor, which is what made the Court of Appeals ruling so unexpected.
“The Board of Directors and management worked tirelessly during the standstill period in an effort to achieve a commercial outcome with Stellar Vision that would protect the interests of all of Hills shareholders, employees and other stakeholders.
“However, we were unable to reach an agreement that met the requirements of all stakeholders.”