Dick Smith administrators have told creditors they may have to wait up to six months to hear whether they’re debt will be returned.
During the first creditors meeting this morning, administrator Joe Hayes of Mcgrath Nicol said that due to the size and complexity of Dick Smith, it would not be able to meet the scheduled date for the second creditors meeting in February.
“In companies of this nature where complex sales transactions need to be consummated, it’s actually reasonably routine to request lengthy extensions,” said Hayes.
“It’s important that the environment remains stable and an administration is a stable environment for the company whereby we have time to unravel our investigation and equally for the receivers should they achieve a going concern sale have the time to make that transaction take place.”
The administrators partially broke down Dick Smith’s $390 million debt during the meeting.
An estimated $220 million in unsecured debt is owed to 200 trade creditors, and another $15 million to employees in wage entitlements, annual leave and long service leave.
Secured creditors are also owed $130 million, which is made up by NAB and HBSC banks.
Hayes added that the company has received 45 expressions of interest for an acquisition, but it was too early to conclude whether there be a return to secured creditors.
“I think what we can say about returns is that a strong offers will be needed for the business to compensate its creditors,” said Hayes.
Former Dick Smith chief executive Nick Abboud announced his resignation on Tuesday, with interim chief Don Grover stepping in. Receivers Ferrier Hodgson said Grover would be working with them in order to restructure the business and secure a return to creditors.
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