Booktopia extends share trading suspension for the third time as funding process drags on

Booktopia extends share trading suspension for the third time as funding process drags on

As Booktopia seeks funding to stay afloat, founder Tony Nash (pictured) has adopted a hands-on role as sales director. 

Cash-strapped online bookseller Booktopia (ASX: BKG) has extended a suspension in trading of its shares for the third time this morning as it continues to seek funding to improve its liquidity, which has been hampered by a self-inflicted decline in sales to cope with the logistical challenges of moving to a new fulfilment centre.

The timing of the move to the new facility in South Strathfield could not have been worse, coinciding with an overall soft performance in the Australian book market amidst cost-of-living pressures, resignations from Booktopia's CEO David Nenke and CFO Fiona Levens, and a cash balance that was already low.

But the remaining leadership appears determined to overcome this unfortunate set of circumstances and not let the company sit on the shelf gathering dust. Founder Peter Nash and chairman Peter George stepped up into on nil priced options, effectively betting that their efforts will lead to recovery. 

For a founder who was formerly CEO and at one point had been unceremoniously ousted from the position, Nash is now taking on what is perhaps the most operationally critical role for a company in need of desperate cash flow improvements - sales director.


Related stories: Booktopia extends share trading suspension as critical funding announcement looms

Booktopia CEO quits, 50 jobs to go as cost-cutting plan kicks into gear


But to get over the hump of bringing sales back to growth and capitalising on the efficiency and productivity gains contemplated under the new fulfilment centre, Booktopia needs working capital, as well as the funds for one-off redundancy payments to some 50 staff; a move that is ultimately expected to save the online retailer money, but in the short-term requires more cash than it actually has.

On Friday, 13 June Booktopia entered a trading halt expecting to make a funding announcement the following Monday. But after the weekend it needed to extend that deadline, and it did so again last Friday, and again today. 

After so many delays, the board has adjusted its expectation setting with a much longer timeline before it will have news to tell, setting a deadline for an announcement by 19 July - around five weeks after the initial pause in trading.

"The company is continuing to seek support from suppliers and existing shareholders. Due diligence has been undertaken by some of these parties and the Company is now seeking to meet the preconditions required for any funding to be made available," Booktopia stated in its ASX announcement this morning.

"The timetable for coming out of suspension is predicated on the form any potential funding takes, and the company expects it will be in a better position to advise on the viability and form of that funding by 19 July 2024.

"In its opinion, the continued trading of the Company’s securities is likely to be materially prejudicial to its ability to seek support from various parties and to obtain necessary funding."

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Fashion retailer Accent Group to cut Glue Store location count in half

Fashion retailer Accent Group to cut Glue Store location count in half

The ASX-listed fashion retailer responsible for such brands as Plat...

Domino's to shutter 100 stores after crusty results

Domino's to shutter 100 stores after crusty results

The board of Domino's Pizza Enterprises (ASX: DMP) waited until...

Wing enters largest Australian drone delivery area to date through Melbourne launch with DoorDash

Wing enters largest Australian drone delivery area to date through Melbourne launch with DoorDash

Alphabet-owned drone delivery company Wing has announced its entry ...

Accolade Wines owner buys French giant Pernod Ricard’s global wine assets

Accolade Wines owner buys French giant Pernod Ricard’s global wine assets

Australian Wine Holdco, a consortium that owns the country’s ...