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In what comes as a brutal final blow to classic Australian brand Oroton (ASX: ORL), creditors have valued the equity in Oroton as nil.
This conclusion will be presented to the NSW courts on July 27th, where the future of the embattled retailer will be decided.
The accessories retailer entered into a Deed of Company Arrangement with Manderrah Pty Ltd in April under the condition that Oroton transfers 100 per cent of shares to Manderrah for nil consideration.
The Supreme Court of New South Wales still has to approve this process, but with the valuation of Oroton's equity has returned as nil this process is likely to proceed.
The value of equity implied by the selected value range for Oroton Group's operating business is below its market capitalisation on the last trading day prior to the announcement that the Administrators had been appointed," says the report.
"We have assumed that the more realistic scenario would be a distressed sale basis (which assumes that secured creditors would fund ongoing trading to the extent necessary to effect the sale on a going concern basis) rather than a 'break up' sale.
"Accordingly, on a distressed sale basis, the assessed value of OrotonGroup's equity is nil."
Oroton slipped into voluntary administration on November 30, two days after it went into a trading halt because of falling sales and a failed Gap apparel venture.
At the time the company fell into voluntary administration 557 staff were employed across 62 stores in Australia, New Zealand and Malaysia, with another 240 working at Gap.
264 staff have already been made redundant as a result of the wind down of the gap joint venture.
In January 2018 Oroton warned landlords that if rent was not significantly slashed then more Oroton stores would close. The retailer demanded a rent discount of 40 per cent.
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