Perth-based Catalano Seafood (ASX: CSF) has a new owner after creditors to the company approved a deed of company arrangement put forward by voluntary administrators.
While the deal is still subject to court approval, turnaround specialist Avior Capital has succeeded in taking control of the family-run business after stumping up $1.7 million to pay out creditors.
The move will ultimately lead to Catalano’s delisting from the ASX, but it is expected to see the retailer, processor and distributor of seafood products continue operating as a going concern.
An exit from the ASX will end a brief listing for Catalano Seafood which began trading in February last year following a $5 million IPO.
Creditors approved the DOCA at their second meeting held yesterday which will lead to operational control of the business being handed to Avior Capital in coming days.
“This is a great outcome that secures the continuation of Catalano Seafood as a well known and loved West Australian brand, together with its 80 employees,” says Rob Brauer, administrator from McGrathNicol.
Brauer and McGrathNicol colleague Linda Smith were appointed voluntary administrators to Catalano Seafood on 18 October with debts to unsecured creditors of more than $3.1 million.
The DOCA put before creditors yesterday provided various returns for unsecured creditors of up to 91.8c in the dollar, although some would have received no return.
The Perth-based Avior Capital, which is led by Dermott McVeigh, has a track record of proposing DOCAs and restructuring transactions since it was founded in 2012.
“These assignments have ranged from designing the restructure of a small father-son flooring business to orchestrating the turnaround of a $200 million engineering group,” the company says on its website.
Business News Australia has sought further comment from McVeigh regarding Avior’s plans for Catalano Seafood.
Catalano was established in 2019 by the Catalano family as a retailer, processor and distributor of seafood products, although the origins of the family-run business stretch back to 1969.
According to the administrators, the company’s financial woes stem from ambitious expansion plans and a shortage of capital.
Despite reporting $15.5 million in revenue, Catalano posted a $2.9 million loss in FY23 with the result impacted by higher labour costs, raw materials and overheads.
The company, which supplied to the likes of Metcash (ASX: MTS) and Coles (ASX: COL), was dealt a blow in June after a proposed $2.2 million capital investment by The Pure Meat & Food Co was withdrawn.
Signs of trouble for the business emerged in July when the company was struggling to pay its bills.
The administrators have revealed that company was likely to have been insolvent from 31 July.
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