By James Wells
BRISBANE: While Craig Lowndes was circling the Mount Panorama racetrack to win the Bathurst 1000 yesterday in the Betta Electrical Supercar, administrators and receivers have been circling the business planning the next stage for Betta Stores Limited (BSL).
Deloitte administrator, John Greig, has provided Current.com.au with an insight into the business which is expected to run as usual now the business has access to additional working capital.
“Essentially what has occurred is that the directors have resolved to appoint myself and a partner as voluntary administrators of all companies in the group as a consequence of the CBA not providing additional working capital for reasons best known to them. Also the CBA has appointed a receiver to six companies within the group,” Greig told Current.com.au.
Greig said that the appointment of an administrator is not necessarily a bad sign for the retail group.
“Whilst it sounds negative there are a number of positives. [Our appointment] has allowed the business to continue to operate. And with the confidence of having appointed a receiver, the CBA has once again made funds available,” Greig said.
“As far as the future is concerned, we have been successful in getting the major suppliers back on board – LG, Panasonic, Electrolux and Fisher & Paykel they are all happy to supply on normal terms and pay rebates. That has allowed us to go to the franchisees and provide them with the assurance that they are after. As a result it is business as usual as the suppliers have been most helpful,” Greig said.
From the initial examination of the business, Greig said the BSL franchise business remains as a viable business proposition, while the company owned stores have been the “noose around the neck”.
“The company has been successful in rationalising stores down and debt has been reduced from $45 million as late as December last year to $16 million – so there is a lot of good work that has been done there.
“The voluntary administration will continue with the strategy that has been started and we have the added advantage to get out of property leases than the company would have been able to do on its own. We are able to disclaim property leases as administrators without any trailing liabilities, whereas the company would normally have to pay until the end of the lease.
“It is business as usual for the franchise network – even better than usual as all of the suppliers and creditors are assured they will be paid from this point forward.”
Greig said that it is likely that the business will continue to trade as there is income yet to be realised from assets which are yet to be sold.
“The strategy of the company that commenced prior to our involvement will be continued with assets like Truscotts to be sold. This will take it back to a core profitable business perhaps more quickly than the company on its own resources.
Greig has confirmed that no staff have left the business at this stage and are assisting the administrators and receivers.
“Neither the receivers or I are experts in running the business. We are working with [the staff] to assist us in what needs to be done.”