Oroton creditors to vote next week on rescue deal recommended by administrators
Written on the 22 March 2018 by David Simmons
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.
Business News Australia
Author: David Simmons