Stationery and office products distributor New Zealand Office Supplies has been placed into voluntary administration after it received more than $200,000 in wage subsidies.
The company, which employs 34 staff and has offices in Auckland, Wellington and Christchurch, was placed into voluntary administration on May 1 and administrators Steven Khov and Kieran Jones of Khov Jones were appointed administrators.
The business has received $239,006.40 in wage subsidies as of May 3, according to the Ministry of Social Development's wage subsidy employer search tool.
Administrator Steven Khov told the Herald the business was "not as viable as it should have been" prior to Covid-19, but the pandemic had tipped the company, which supplies retailers and schools around the country with office supplies, over the edge.
It had been impacted by the store closures of its suppliers, Khov said.
"It was viable [before lockdown] but not as profitable as what it should have been," he said.
"Because of the reduced operations caused by the lockdown it forced the business - prior to our appointment - to cut their staffs' hours down but they were still getting the wage subsidy at a minimum."
The company owes creditors an undisclosed "seven-figure" sum, but the company had kept the wage subsidy it received in a separate bank account, Khov said.
Administrators are now continuing to trade the business in the hope of finding a buyer.
The administrators are open to offers and hopeful that they will be able to find a buyer to take over the business despite the uncertainty caused by Covid-19.
"We are engaging with interested parties at the moment, but it's too soon to comment on whether there will be a definite sale; we're hoping that there will be," Khov said.
"What happens with a potential sale will depend largely on what that return [to creditors] will look like."
There was still a market for buying new businesses despite the circumstances, he said.
Administrators expect to secure a buyer or progress to the next stage in the next three weeks.
New Zealand Office Supplies last year acquired Fuji Xerox's paper-supply business.