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Thursday 14th January 2010 |
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Eastern Hi Fi Group, the home audio equipment company, has called in the receivers after the burden of leases on disused premises grew too much.
In a statement to the stock exchange today, the NZAX-listed company it had been unable to “rid itself of the leases of unused and slightly used premises which are now redundant in the company’s hands and cause unprofitable trading” and asked ASB Bank as first charge holder to appoint receivers, which called on KordaMentha’s Michael Stiassny and Brendon Gibson.
Gibson told BusinessWire the company owed creditors about $4 million across the entity, including bank loans.
“We’re assessing the position and working out how best to proceed,” Gibson said. “It’s a reasonably simple business with limited retail businesses now, and it’s got an import distribution” and he said they’re still considering what the best option will be.
Eastern Hi Fi said it wasn’t able to fill a share issue last year, and “the funds then obtained to give time to turn around the business operation and quit the leases have now been used and so the directors have no ability to continue the company trading in such circumstances.”
The company reported a full-year loss of $980,000 in the 12 months to June last year, and as at June 30, had lease commitments of some $1.7 million.
It had pared back its retail outlets to three stores at that time. The shares, which trade infrequently, last traded at 8 cents on Jan. 12.
Gibson said one store would be trading tomorrow while they took a stocktake of inventory.
The company’s wholesale division, Avalon Pacific Marketing Ltd., has also been put into receivership.
Businesswire.co.nz
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