Dick Smith staff face two-month wait on future

In the event of a going-concern sale, the receivers "will endeavour to ensure" employees can transfer their entitlements to the purchaser. Photo / Michael Craig
In the event of a going-concern sale, the receivers "will endeavour to ensure" employees can transfer their entitlements to the purchaser. Photo / Michael Craig

The receivers of Dick Smith Holdings have told employees it may take six-to-eight weeks to determine if the consumer electronics chain can be sold as a going concern.

"We are immediately seeking a sale of the business as a going concern and advertisements will appear in the national newspapers shortly," James Stewart of Ferrier Hodgson said in the circular to employees in Australia and New Zealand.

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In the meantime, workers would stay on under the same terms and conditions, with wages paid as usual in the next payroll, he said.

In the event of a going-concern sale, the receivers "will endeavour to ensure" employees can transfer their entitlements to the purchaser.

The circular says workers at the 393-store retailer must have written authority from the receivers for activities including placing orders or accepting deliveries for goods and services, entering into commitments with suppliers or customers, incurring debts or pledging assets of the company, making payments, agreeing to any compromise or arrangement including set-offs with debtors or creditors, or returning goods to suppliers.

Stewart also reminded Dick Smith employees that every invoice, order for goods or other document must have have the words "in receivership" after the company name.

Dick Smith's shares were suspended from trading on the ASX after its banking syndicate withdrew support and put the company in receivership.

The stock last traded at 35.5 Australian cents on the ASX, having tumbled 84 percent from the A$2.20-a-share Anchorage Capital Partners set for its initial public offering in 2013.

It bought Dick Smith from Woolworths in 2012, in a deal reportedly valued at about A$115 million, before selling down in 2013 in an IPO that valued the company at A$520.3 million. Anchorage sold its remaining 20 percent in September 2014 for about A$2.22 a share.

Dick Smith chairman Rob Murray said this week that while the company had explored alternative funding, "directors formed the view that any success in obtaining alternative funding would not have been sufficiently timely to support short-term funding requirements and allow the company to order required inventory during the next four-to-six weeks."

- BusinessDesk

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