Spark owed $26m by troubled Mako Networks

Mako Networks chief executive Bill Farmer (L), co-founder and vice president Chris Massam (c) and co-founder and president Simon Gamble. File photo.

Spark is owed about $26 million by the troubled Mako Networks, according to one person familiar with the situation.

Mako Networks, a network security firm based on Auckland's North Shore, was put into voluntary liquidation on August 20 by its shareholders, according to the Companies Office.

The following day, a secured creditor appointed receivers to the firm.

Spark this morning has confirmed it appointed the receivers and said it had previously provided asset finance to Mako.

Spark did not say how much it was owed but a source told the Herald the amount was close to $26 million.

"We have made provisions against this receivable in our last two financial years and are comfortable with the carrying value," a Spark spokesman said.

The telco said that it leased technology hardware to Mako and in 2014 restructured debt it was owed and gave the security firm a repayment holiday for two years.

"Unfortunately, 18 months on, Mako's financial position has deteriorated to the point that Mako directors have decided Mako cannot continue normal business operations. It is disappointing to see an innovative New Zealand technology company struggle in this way," the spokesman said.

Mako also provided technology for Spark's SecureMe service.

SecureMe is a business cyber-security product which Spark brought in house last year.

"This included the acquisition of rights to relevant intellectual property from Mako and the transfer of a small number of highly trained staff to Spark Digital, to facilitate in-house delivery of the SecureMe service. This means the SecureMe service is effectively ring-fenced from the rest of Mako's operations and the receivership will not have any impact on the delivery of SecureMe services to Spark customers," the spokesman said.

According to the Personal Property Securities Register, Spark was registered as a Mako Networks creditor in 2010.

Receiver Neal Jackson could not be immediately reached for comment.

Mako has offices in San Francisco, London and Auckland.

According to National Business Review's website, Mako's Auckland office - which employed 39 staff - has been shut.