OrotonGroup enters administration
Oroton stores will continue to trade while the company continues its store closure plan for the GAP business, which it exited earlier this year.
The company today appointed Deloitte Restructuring Services partners Vaughan Strawbridge and Glen Kanevsky as administrators, who “will re-engage with interested parties and stakeholders to progress a sale or recapitalisation”.
“Our focus is on continuing to operate the business, as we seek a recapitalisation or sale of this iconic brand,” said Strawbridge.
“The flexibility of the voluntary administration process enhances the ability to further restructure OrotonGroup in a manner which makes it possible to achieve the best possible outcome in these circumstances.
“Our ambition is that a stronger Oroton business will emerge from this process”.
Oroton announced in May that it was experiencing challenging trading conditions and posted an earnings downgrade in addition to the commencement of its review.
Since then, the company’s secured financier received critical credit support from one of its major shareholders, James Will Vicars and entities controlled by him, which allowed the retailer a ‘stay of execution’ for six months.
“We have made every effort to avoid taking this decision but have been unable to source a viable solution which could achieve a better outcome than voluntary administration,” said Interim CEO and managing director Ross Lane.
“The board is disappointed that it has had to take this step after running such a comprehensive process.
“However, having carefully considered the options available to the company at the conclusion of its strategic review, it is apparent that voluntary administration is necessary to protect the Oroton business and the future of this iconic Australian brand.”
The company’s AGM planned for tomorrow will not proceed and there will be a first meeting of creditors on Monday 11 December 2017.
Oroton has been in a trading halt since November 28 and is now suspended from the ASX.
More to come…
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