Receivers have been appointed to troubled Australian buy now pay later company Openpay, which has been operating in New Zealand since 2013.

The receivers are now in control of all the company’s assets, operations and trading activities, according to an ASX announcement.

Advisory and restructuring firm McGrath Nicol has been called in to work with Openpay’s employees, merchants and customers to urgently determine the best strategy for the business, the statement said.

“At this time, customers will no longer be able to use the Openpay platform for new purchases, but are still required to pay any outstanding balances in accordance with their existing agreements.”

It is expected that the company’s shares will be suspended until further notice.

The Motley Fool financial and investing website said Openpay last week revealed it was having problems getting hold of its A$41 million unused finance facilities.

“It appeared to indicate that the financiers weren’t overly keen to put this money up due to its abject financial performance and fear that it would essentially be money down the drain.”

Openpay’s buy now pay later loans resulted in A$344 million (NZ$374.71) of transactions in Australia, New Zealand, the United Kingdom and the United States, in the last financial year, according to the company’s annual report.

It reported a statutory net loss of A$82.5m in the year to June 2022. Since then it has looked to focus on its home market, closing its UK and US operations earlier this year.

Last November, the company received a formal warning over not having an anti-money laundering/countering the financing of terrorism (AML/CFT) programme.

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New Zealand’s Department of Internal Affairs (Te Tari Taiwhenua) said Openpay was not alleged to be involved in money laundering or the financing of terrorism, but the company “failed to establish, implement, and maintain an AML/CFT programme, and failed to adequately monitor accounts and transactions over an extensive period”.

The warning was issued under the 2009 AML/CFT Act, which aims to protect NZ’s international reputation and public confidence in the finance system by setting up a system to detect and deter money laundering and the financing of terrorism.

The BNPL sector has faced some challenges in New Zealand too.

Last month, Kiwi BNPL operator Laybuy Group Holdings went into a trading halt at the request of the company as it looks to de-list from the Australian stock exchange.

The firm based on Auckland’s North Shore listed on the ASX in September 2020 with an initial public offer price of A$1.41. But its shares fell sharply and by January 23 were worth just A6 cents.

And last August, Australian financial services group Humm announced it would close down its Kiwi BNPL operation.

Humm was previously called FlexiGroup and entered the New Zealand market in August 2017 with a product called Oxipay.

BNPL businesses thrived during the early stages of the Covid-19 pandemic as shoppers were driven online to make purchases.

But more recently, rising interest rates have caused trouble for some companies in the sector.