By Martin Vedris
SYDNEY: The latest casualty of the economic downswing, Strathfield Group has today announced it has placed itself in voluntary administration. Unable to meet creditors’ demands, the business aims to restructure in the hope it can continue trading.
The company’s shares were placed on a trading halt on the Australian Stock Exchange last Friday 23 January and today the company stated that trading of the company’s shares will remain suspended during the period of administration.
The administrators, BRI Ferrier, stated the Strathfield Board’s review of the business accounts found that pending a final audit review, the company is likely to be found in a “negative Net Assets and Shareholders’ Funds position as at 31 December 2008”.
BRI Ferrier also stated that the future structure of Strathfield Group would be a franchising business model. The aim of this structure would be to inject capital back into the business and provide a retail network that can be charged a franchise operating fee by Strathfield Group administration for conducting business.
A spokesperson for BRI Ferrier, Graham Cassidy, today told Current.com.au that “BRI Ferrier’s job is to keep the doors open”.
“The Strathfield directors proceeded to voluntary administration predicated on formalising the structure to get back in business and out of voluntary administration as soon as possible.
“The company is still trading, and will continue to trade as normal, but under the jurisdiction of the administrators rather than the directors.”
When asked whether any of the outstanding debts to suppliers would be repaid in full once the administration is complete, Cassidy said, “The whole idea of getting the administrators in is to keep the business going and try to operate business as usual.”
In terms of staff, the administrators stated that the aim was to maintain “maximum possible staff retention” but any staff who wish to leave the business and not take part in the proposed franchise agreement structure “are expected to receive their entitlements in full”.