By James Wells
SYDNEY: The administrators for Retravision NSW, Grant Thornton, have recommended a proposal put forward by Retravision head office in conjunction with Retravision Queensland and Retravision Victoria/Tasmania to split the business currently in receivership.
According to a report to creditors, the administrators have received two separate proposals for Deeds of Company Arrangement. One proposal known as the Migration DOCA which is supported by Retravision Australia CEO Keith Perkin will see Retravision NSW split into two parts and handed over to Retravision Vic/Tas and Retravision Queensland in return for the payment of a trailing commission over the next three years based upon purchases.
The second proposal, known as the Equity DOCA from recently appointed company CEO Ian Goldmann, is for the company to be restructured and recommence trading in its own right. Funds would be generated for creditors through the payment of a similar trailing commission and the prospect of equity participation from profits.
According to the administrators, the two proposals present the administration with a simple recommendation.
“The Migration DOCA is fully developed and has the benefit of greater certainty of a return to creditors,” the administrators’ report said.
“The Equity DOCA is however merely at a conceptual stage and has many significant hurdles to cross before it is developed to a level whereby it can be properly assessed by the administrators and fully considered by creditors. It is unsupported by proper forecasts and projections and is missing fundamental elements such as funding, directors and store owner support.
“The risk of not accepting the Migration DOCA proposal and adjourning the meeting to allow the Equity DOCA proposal to be developed is significant.
“It is therefore our recommendation that the Migration DOCA proposal be the preferred DOCA.”
The administrators have based their decision upon the merits of each deed proposal and ultimately whether each represents a better and/or more certain prospect of a return to creditors than under any of the alternative outcomes.