SurfStitch fate could be decided next month
Written on the 19 March 2018 by Ben Hall
The future of surfwear chain SurfStitch Group (ASX: SRF) could be decided early next month at a meeting of creditors which will consider an offer for the embattled retailer.
Administrators, John Park, Quentin Olde and Joseph Hansell of FTI Consulting, released an ASX statement which confirmed the meeting would be held on April 4 in Sydney.
"At the second creditors' meeting, the creditors will determine the future of the companies and outcome of voluntary administrations," the statement says.
"The administrators consider that it would be in the creditors' interest for a deed of company arrangement to be executed in accordance with a proposal received from Ezibuy Holdings Ltd."
Ezibuy is an online New Zealand business which sells apparel and homewares and they presented a second deed of company arrangement to creditors.
The first one was a proposal from non-executive director Abigail Cheadle in September last year. That offer was conditional on settlement of class actions against SurfStitch and included swapping debt for equity for major creditors.
SurfStitch went into voluntary administration in August after the impact of a series of legal battles and class actions took their toll on the online retailer and ASX listed company.
The company downgraded its earnings three times, largely because of a dispute with surf technology group Coastalwatch and Crown Financial over the licencing deals which fell through, and this wiped around $20 million off revenues.
The company was reluctant to enlist administrators FTI Consulting and it still faces a $100 million class action filed on behalf of shareholders by Quinn Emanuel Urquhart & Sullivan.
SurfStitch entered the ASX as a market favourite in 2014, however its spectacular fall from grace wiped almost 93 per cent off its total market value.
Business News Australia
Author: Ben Hall