Postie Plus appoints administrator after bank pulls support
June 3 (BusinessDesk) - Postie Plus, the worst performing stock on the New Zealand stock market, has appointed
administrators after its lenders withdrew support as the company continued to make ongoing losses.
The Auckland-based retailer appointed David Bridgman and Colin McCloy of PwC as administrators, saying attempts to
recapitalise the business had been unsuccessful. The retailer's board also sought to sell the business outright, or find
a new cornerstone shareholder. The administration should allow Postie Plus to keep trading so it can be sold as a going
concern.
"Despite restructuring, optimising of the existing DC (distribution centre),and recent improvements to gross margin and
market share, the company has continued to make ongoing trading losses," the company said in a statement. "The company's
bank has been supportive through this period, but has decided it cannot extend its facilities further to cover ongoing
losses."
In April, Postie Plus said it was in breach of its lending covenants and expected to remain so “for the foreseeable
future,” meaning its bank funding is repayable on demand, though the arrangements it had in place with its bank were
sufficient to meet the company’s forecast funding requirements up to July 30.
The company was hit by supply chain disruptions in the summer of 2012 and 2013 after outsourcing its distribution centre
to a third part, while shifting its headquarters to Auckland, where it anticipated growth. After receiving legal advice,
Postie Plus said it intends to "vigorously" pursue a damages claim.
The shares were halted on Thursday at 7.3 cents, valuing the company at $2.9 million. The shares have,slumped 72 percent
since the start of 2012.
(BusinessDesk)