Wannabe digital bank Goldfields Money is owed $526,000 in fees by failed ATM maker Stargroup — and has about $6.5 million cash sloshing around the group’s teller machine network.

Kalgoorlie-based Goldfields — which recently underwent a failed bid to rebrand itself Bare Money and is now subject to a takeover bid — provided the cash for Stargroup’s network of automatic teller machines.

Stargroup yesterday called in the receivers after failing to restructure debt.

It’s understood Stargroup (ASX:STL) had total debt of $9.5 million. The company’s market cap is about $13 million.

Goldfields (ASX:GMY) today told its shareholders that the $6.5 million it has in Stargroup’s ATMs “is and remains the property of Goldfields Money.

“This cash is also fully insured in the event of loss or theft… The company currently has circa $6.5 million deployed as part of the $30 million Stargroup bailment facility and does not consider that the appointment of the receivers and managers places these funds at risk in any way.”

Recovery of the $526,000 in fees “remains under discussion and a further update will be provided once these discussions are completed”, the bank said.

Stargroup, which had plans to convert its some of its machines to digital currency Bitcoin, is trading as normal despite going into administration.

The receivers — Richard Tucker and John Bumbak of insolvency experts KordaMentha — are seeking expressions of interest to sell or recapitalise the business.

In Australia, Stargroup has 500 of its own ATMs and manages another 2400 operating in pubs, convenience stores and similar locations.

CEO Todd Zani told Stockhead the recent move by major banks to stop charging ATM fees was not the cause of the debt issue. Stargroup charges several dollars for transactions on its machines.

The company in September announced a joint venture with DigitalX, a blockchain technology and advisory company, to convert ATMs to trade the digital currency Bitcoin.

Currently there are fewer than 20 ATMs in Australia which can process a Bitcoin transaction with conversion fees between 4% and 8% of the transaction value.

In 2017, Stargroup posted a 128.4 per cent rise in full year revenue to $8.36 million. Profit more than tripled to $1.94 million.


This article first appeared on Business Insider Australia, Australia’s most popular business news website. Follow Business Insider on Facebook or Twitter.