Daisytek Australia has retrenched nearly 30 staff and closed its Perth office as administrators work towards a sale of the troubled distributor.
Uncertainty over Daisytek Australia’s future, in the light of its parent company’s bankruptcy proceedings in the US and the sell-off of global subsidiaries and assets, has led vendors — including HP — to scale back their business with the local operation.
HP had begun implementing “alternative distribution channels” for its resellers over the past couple of weeks, according to HP spokesman Hugh Scott.
The measures were taken to ensure supply for Daisytek Australia’s resellers, he said.
HP had been trading with Daisytek Australia on cash-only terms since its US parent went into Chapter 11 bankrupcy proceedings in May, Scott said.
“We were working very hard to accommodate their needs and assist them in terms of their financial liability,” he said.
This included carrying the cost of housing and air freighting stock, Scott said.
Daisytek continues to trade, although the loss of “just under 30 staff” reflected a “widespread” reduction across the business, PricewaterhouseCoopers administrator, Martin Brown, said.
The closure of the Perth office affected four staff. The remainder were culled from the NSW operation, he said. The administrator was tightlipped about how many potential suitors had submitted formal expressions of interest in Daisytek by the June 17 deadline. However, the Federal Court, on June 4, granted the administrators an extra month to work on a sale before convening another creditor’s meeting.
In that ruling, Justice Lindgren said there was evidence of “purchase or investment” interest from 14 parties.
Meanwhile, major creditor, GE Capital Finance, has won its Federal Court application to protect its stake in Daisytek.
The order, made on June 13, held GE Capital Finance to be a secured creditor. The finance giant is owed $4 million by Daisytek which represents a mortgage over $28 million of Daisytek assets.
It is a setback to the voluntary administration, as it allows another creditor to step up to the table, but administrator, Martin Brown, said the “main thing it does is give clarity. It allows us to move forward, which is good.”
The administrators now have until July 4 to convene the creditor’s meeting.
Brown expected the meeting would be held next week.