Media Options looks likely to be saved from liquidation by an eleventh- hour offer from a mystery ‘big player’ in the printing industry, with the deal to be finalised this week.
Administrator David Iannuzzi at Veritas Advisory says the company which collapsed with debts of $3.3m looked doomed until a buyer ‘came out of the woodwork’ at the last minute with an offer that was accepted by creditors.
He says details are still being fine-tuned and once the first payment is made, due this week, the deal will be finalised.
Iannuzzi says a small return to creditors may be possible if the company does better than expected under new ownership, but he considers this unlikely – meaning creditors would lose the $2.5m net debt owed after the company’s collapse on September 26 last year.
[Related: Media Options collapse]
He says creditors – such as Heidelberg Print Finance (owed $1.6m), Fuji Xerox (owed $134,000), and Paperlinx business Spicers (owed $100,000) – chose the new buyer over an offer from former directors including Bhaskar Datta.
“They are not happy about losing their money, but are at least happy to help determine the future direction of the company,” he says.
“While there will be significant losses, the future income of the business from the new reputable owners is safer than under the current ones.”
Media Options has been trading under license through two entities, Sureprint and Sydney Print Hub, since it entered administration.
Employees are owed superannuation entitlements of $215,000 to $250,000 and the Australian Tax Office owed $762,000 – the return to them is also unclear.
The company collapsed due to a decline in revenue and unsustainable overheads, which included a monthly payroll of $120,000, and it lost two key sales representatives who were generating about $200,000 in monthly sales in October 2012.
Iannuzzi wrote in his report to creditors last year: “The director noted that the company had employed a large number of staff with a view to grow the business, however the reality of the situation meant the company was eventually unable to support the overheads.”
[Related: More credit and debt news]
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter