Oroton creditors to vote next week on rescue deal recommended by administrators

Oroton creditors to vote next week on rescue deal recommended by administrators

Creditors of luxury handbag retailer Oroton (ASX: ORL) will vote next week on a $25 million rescue plan that will hand control of the company to major shareholder Will Vicars.

The company's administrator, Deloitte, has recommended creditors vote in favour of a deed of company arrangement that would return between 36 and 58 cents in the dollar to creditors.

The 80-year-old company slipped into administration in November 2017 following declining sales.

Creditors will vote next week in Sydney on March 28.

Vaughan Strawbridge, Oroton's voluntary administrator, says the deal could be complete within two months and ensure the company has a strong and stable future and safeguard 350 jobs.

"This has been a complex and high profile appointment," says Strawbridge.

"In the interests of creditors, our focus has been on maintaining as much of the group's operations as possible, including across its extensive retail network."

Strawbridge says the proposal from major shareholder Vicars is the superior offer from those received, and ensures the best possible return for creditors.

Vicars, co-chief of Caledonia Funds Management, owns an 18.2 per cent stake in Oroton.

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.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

Qantas acquires Byron Bay-based travel agency TripADeal

Qantas acquires Byron Bay-based travel agency TripADeal

Australia's flagship airline Qantas (ASX: QAN) has taken a majo...

The Star “cleansing” continues with more management resignations

The Star “cleansing” continues with more management resignations

Evidence given today at a review into casino and resort operator Th...

Drone tech company Aerologix flying high after closing $4.2 million raise

Drone tech company Aerologix flying high after closing $4.2 million raise

Sydney-based drone tech company Aerologix is taking its operations ...

Spilling into the market: Ulu Hye cracks deal with Woolworths

Spilling into the market: Ulu Hye cracks deal with Woolworths

Plant-based milk start-up Ulu Hye has announced it will be launchin...