Troubled electronics retailer Dick Smith has been placed in voluntary administration after failing to secure a funds injection from its banks.
The company blamed its financial woes on worse-than-expected sales and cash generation in December, continuing the weak trend from previous months.
"Whilst confident on the long-term viability of the company, the directors have been unsuccessful in obtaining the necessary support of its banking syndicate to see it through this period," chairman Rob Murray said in a statement on Tuesday.
The company explored alternative funding, but concluded that this would not be secured in time to order the required inventory during the next four to six weeks, he said.
The announcement comes a day after Dick Smith shares were put in a trading halt, a move that revived investor fears about the company, whose share price has tumbled 84 percent since last May.
The shares have now been suspended from trading.
The retailer first warned in October that its full-year profit could fall by as much as 15 percent, to between AU$37 million and AU$43 million, as it stepped up discounting and advertising to restore sales growth.
However, the sales slump continued into November, resulting in the company having to dump its profit forecast a few weeks later.
The retailer was forced to launch a firesale in early December to clear unwanted stock, which cost it around AU$60 million in writedowns.
Shares in the company have been battered in recent months, wiping out hundreds of millions of dollars in market value.
Dick Smith shares closed at 35.5 cents on the last trading day in 2015.
Retail giant Woolworths received AU$94 million after selling Dick Smith Holdings to private equity firm Anchorage Capital Partners in 2012. At the time, Woolworths noted that it spent AU$420 million during its year of ownership on restructuring Dick Smith before it accelerated the process of selling it off to Anchorage. This was despite Woolworths having previously stated that Dick Smith's online presence was one of its more successful avenues for revenues.
At the time of purchase, Anchorage said it was going to support Dick Smith through additional cash investments and guarantees, and intended to keep all 325 stores, which employed 4,500 people throughout Australia and New Zealand. Anchorage also had intentions to expand the retail network.
A year later, Anchorage floated the company on the Australian share market at AU$2.20 per share, valuing it at AU$520 million.
In the same year, Dick Smith announced its adoption of Google Apps to aid communication and collaboration between its workers across Australia and New Zealand.
Dick Smith director of IT Linda Venables said at the time that the use of Google products would help build a sense of community between employees and the company.
"We have been looking for ways to improve collaboration because, until now, communication in stores have been a hierarchical one-way process through the manager," she said.