Postie Plus [NZX: PPG], the worst performing stock on the New Zealand stock market, has appointed administrators after its lenders withdrew support as the company continued to make ongoing losses.
The Auckland-based retailer appointed David Bridgman and Colin McCloy of PwC as administrators, saying attempts to recapitalise the business had been unsuccessful. The retailer's board also sought to sell the business outright, or find a new cornerstone shareholder. The administration should allow Postie Plus to keep trading so it can be sold as a going concern.
"Despite restructuring, optimising of the existing DC (distribution centre),and recent improvements to gross margin and market share, the company has continued to make ongoing trading losses," the company said in a statement. "The company's bank has been supportive through this period, but has decided it cannot extend its facilities further to cover ongoing losses."
In April, Postie Plus said it was in breach of its lending covenants and expected to remain so “for the foreseeable future,” meaning its bank funding is repayable on demand, though the arrangements it had in place with its bank were sufficient to meet the company’s forecast funding requirements up to July 30.
The company was hit by supply chain disruptions in the summer of 2012 and 2013 after outsourcing its distribution centre to a third party, while shifting its headquarters to Auckland, where it anticipated growth. After receiving legal advice, Postie Plus said it intends to "vigorously" pursue a damages claim.
The shares were halted on Thursday at 7.3 cents, valuing the company at $2.9 million. The shares have,slumped 72 percent since the start of 2012.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Facebook exec on info requests from NZ govt agencies: the numbers, and the criteria for forking over your data
- READER POLL RESULT: Will a land tax on foreign-based house buyers cool the housing market?
- Concession on fees sees ANZ first onboard for Apple Pay
- EPL options narrow: Sky, beIN or nothing
- Speculation over Hilary Barry's next move
Most listened to
- Listen to the week’s top business news on NBR Radio’s week in review
- Matthew Hooton on Winston Peters’ plan to become prime minister
- Tim Hunter asks: Is the government planning to hand control of water to iwi?
- Rob Hosking breaks down the political and economic week that was: Has everyone gone tax mad?
- Rodney Hide on the technological development and economic advance in transport