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$25 Million Deal to Save Oroton
With about 350 staff entitlements to be paid for and no immediate store closures, the rescue plan for Oroton Group has been put in motion.
Oroton will live to see another day after creditors for the collapsed Oroton Group voted in favour of the deed of company arrangement (DOCA) put forward by fund manager Will Vicars to purchase the business.
Oroton was placed into voluntary administration in November last year following a series of earnings downgrade blows and plummeting sales. “The flexibility of the voluntary administration process enhances the ability to further restructure Oroton Group in a manner which makes it possible to achieve the best possible outcome in these circumstances,” said administrator Vaughan Strawbridge from Deloitte Restructuring Services at the time. “Our ambition is that a stronger Oroton business will emerge from this process.”
And emerge stronger it will, it seems, with the $25 million proposal to purchase the business is going ahead. Unsecured creditors will receive 36-58 cents on the dollar under the DOCA. “Based on our recommendation, creditors have voted to support the Vicars proposal. It will deliver a better outcome compared to other offers received, including the best possible financial return as well,” Strawbridge said in a statement after the second creditors’ meeting last week.
There were 40 offers put forward to purchase the business, however administrators had recommended the Vicars’ deal, stating that it was superior to other offers and would ensure the best possible return for creditors via a recapitalised business, providing ongoing roles for employees and continuing relationships with suppliers, landlords and other stakeholders.
The court process is expected to take approximately two months to complete now that the DOCA has been approved by creditors.