REDgroup's unsecured New Zealand creditors were owed $21.5 million when the company, which owns the Whitcoulls retail chain, went into voluntary administration.
The group's Australian creditors were out of pocket by A$25.5 million ($34.5 million), REDgroup's New Zealand creditors were told at a meeting at the Ellerslie Events Centre yesterday.
Employee entitlements across the whole group came to A$7.8 million, with the New Zealand staff component totalling $2.1 million. The company's total secured debt was A$118 million, most of it to private equity owners Pacific Equity Partners (PEP).
The meeting, held in conjunction with another meeting of REDgroup's Australian creditors across the Tasman, confirmed Ferrier Hodgson as administrators.
The insolvency specialist is to prepare a report on the state of play with REDgroup, after which there will be a "watershed" meeting of creditors in five weeks' time.
Yesterday's meeting appointed creditors committees for the company's various New Zealand businesses.
The watershed meeting will determine whether the company continues under a deed of arrangement, is returned to its directors, or is liquidated. PEP tried to sell its New Zealand assets last year.
There are five companies in REDgroup's New Zealand operations that are covered by the administration. They are WGL Holdings Ltd, Whitcoulls Group Ltd, Calendar Club NZ Ltd, Borders New Zealand Ltd, and REDgroup Online Ltd.
New Zealand is fairly new to the voluntary administration process. Before 2007, New Zealand's insolvency regime was limited to receiverships, creditor compromises and liquidations.
PEP bought Whitcoulls and Angus and Robertson from WH Smith in 2004. Later, it acquired 32 Borders stores in New Zealand, Australia, Singapore and consolidated them into REDgroup Retail.
This is an abridged account of the NZH story. Link here for the full report.
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