By Fiona Rotherham
The receivers' first report on the failed Dick Smith Electronics NZ chain has estimated there's likely to be a net loss of nearly $98 million to priority creditors even before the costs of selling assets are considered.
Ferrier Hodgson was appointed receiver and managers of the Australian company and its related subsidiaries in early January and said last month that it was closing all 62 stores in New Zealand and around 300 in Australia progressively over the next seven weeks.
That decision followed an unsuccessful sales process where despite receiving a significant amount of expressions of interest, the receivers said no acceptable offers had resulted for either the company as a standalone business or all of the group.
Nearly 3,000 staff lost their jobs as a result, including 430 in New Zealand.
The receivers' first report for local holding company DSE (NZ) lodged with the Companies Office says the chain owed $137 million to secured lenders including Westpac Banking Corp and the National Australia Bank, with the debt cross-collateralised across the whole group's assets.
That means returns to New Zealand creditors are dependent on what's realised within other entities of the group rather than just the NZ operation.
As the receivers are currently undertaking a fire-sale of stock as the stores close, they were unable to estimate how much will be realised from the current inventory of $32.8 million.
The receivers said it wasn't practical to estimate a completion date for the receivership at this time.