Oroton to vote on $25 million buyout proposal by major stakeholder
OrotonGroup has received a takeover proposal from shareholder and creditor Will Vicars, who has said he will acquire the Australian accessories company for AU$25 million.
Administrators, Deloitte, have backed the proposal to salvage the collapsed luxury leather goods retailer. Vaughan Strawbridge, administrator at Deloitte, told local media that creditors would vote on the proposal at a meeting on March 29.
“The Vicars proposal is superior to other offers received and ensures the best possible return for creditors via a recapitalised business that will provide ongoing roles for employees, and continuing relationships with this iconic Australian brand for suppliers, landlords and other stakeholders,” said Strawbridge.
Vicars's proposal will see a return to creditors of between 36c to 58c on the dollar, with all staff entitlements and no further store closures.
The backing comes after Oroton was placed in voluntary administration in December after its financial adviser, Moelis, was unable to find a buyer.
Vicars, a major stakeholder, has been negotiating a Deed of Company Arrangement since his nomination as preferred buyer by administrators.
In addition, he has been negotiating with landlords for rent cuts of up to 40% to keep Oroton's 50 remaining stores alive.
In other news, former Cue Clothing Company chief executive David Kesby could be appointed to the new board of Oroton under Vicar's plan, which will take the retailer private, as per reports by the Australian media.
A women's fashion retail expert, Kesby has been advising Oroton on its retail and property strategy since it collapsed last November owing about $40 million to creditors.
Vicars currently owns 18 per cent of Oroton and has been under pressure from shareholders to privatise the company. He made a last-minute offer after a six-month sale process run by the company's adviser Moelis failed to generate firm bids.
Oroton, founded in 1938 by the Lane family - who still hold a 21% stake in the company's shares - has struggled in the last five years as it lost market share to more recognised foreign brands such as Michael Kors and Kate Spade.
It filed for administration in last year as it struggled under the weight of a $40 million debt load.
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