UK budget smartphone maker Wileyfox has called in the administrative receiver Quantuma, The Register can confirm.
The administrator was appointed late on Monday and spent yesterday at Wileyfox's premises.
Quantuma told us it had reduced Wileyfox's costs to the "bare minimum", which involved laying off 20 staff, and was exploring options that included a potential trade sale.
Wileyfox employed around 30 staff in the UK as well as some European sales reps, the administrator said.
Andrew Andronikou, partner at Quantuma, claimed Wileyfox's holding company was primarily funded by Russian bank Promsvyazban (PSV), which was bailed out by the Central Bank of Russia in December and put into special measures that restricted lending outside of the country.
As a result, PSV pulled funding for a number of companies and all working capital for Wileyfox has been "temporarily suspended" with resolution some way off, he said.
"We have got a chain reaction from the bank, the fund has been frozen so facilities of the holding company impacted the continuation of trading... in terms of distributing monies outside of Russia, that tap was proverbially turned off."
Andronikou added: "Distribution of the handset hasn't been successful, it hasn't penetrated the market in accordance with the time set out [by management]. They still had to spend a lot on marketing."
Launched in 2015, Wileyfox was quick to cotton onto the growing trend of non-contract handsets with its low-cost devices. It had to move quickly away from Cyanogen OS after OEM licensees were left stranded in 2016.
Ben Wood, analyst at CCS Insight, said Wileyfox had lost momentum. "The market has moved against it... with strong competition from Huawei, Alcatel, and a whole host of companies."
After the EU referendum, pound sterling slid in value relative to the US dollar and so the cost of components rose. The cost of memory for example had shot up by a quarter, he added.
"Trading conditions for those like Wileyfox have become more challenging – if you are running a highly geared low margin business then all the economics become unviable."
A community manager at the smartphone company posted on Reddit that Wileyfox Europe Limited is in Administration. He wrote: "As of now I no longer work for Wileyfox, I will still try to provide some support for you but it will no longer be official.
"I'm afraid I won't be able to answer such questions as 'What will happen to my phone that's off for repair?'"
The Register has asked Wileyfox for a comment and is awaiting a response on the impact on customer warranties and phones that were being repaired. ®
*Total inability to sell users phones