Australia’s largest online book retailer has entered voluntary administration just four years after its debut on the ASX, having failed to secure additional funding following a significant slump in share value.
Selling books has become among the “toughest businesses in the world”, says Sky News Business Editor Ross Greenwood.
Mr Greenwood says this is the same for Booktopia, whose shares are suspended from the ASX pending a statement on Friday.
Major project status means the company will receive extra government support to clear regulatory hurdles.
The retailer announced on Wednesday that it had entered voluntary administration, less than four years after the company went public on the ASX.
McGrath Nicol Restructuring partners Keith Crawford, Matthew Caddy and Damien Pasfield will oversee the administration of Booktopia and its subsidiaries.
In a statement, administrators said they were undertaking an “urgent assessment” of the business while options for its sale and recapitalisation were being “explored”.
“The shares of Booktopia Group will remain suspended from trading during the administration process. Shareholder updates will be uploaded to the ASX platform as required,” the statement read.
Australia’s largest book retailer collapsed less than four years after going public on the ASX. Picture: Supplied
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The administrators have called on any parties interested in acquiring Booktopia to contact them urgently.
The first meeting of creditors, which must be held within eight business days after the administration begins, will take place on July 15.
In mid-June, Booktopia shares were suspended from trade after falling to just 4.5c.
Comparatively, Booktopia shares were listed at $2.30 in December 2020 and were near the $3 mark the next year.
Booktopia CEO Tony Nash pictured in 2020 at the company’s distribution centre in Lidcombe in Sydney’s west. Picture: Britta Campion / News Corp Australia
The retailer said it was finalising a “material announcement” after halting share trading on June 13 as it sought additional funding.
Early in 2023, Booktopia slashed about 15 per cent of its staff in the hopes to free up $12 million-$15 million in capital, a decision chairman Peter George called “disappointing but necessary”.
On June 28, the bookseller requested its extension to suspend trading of its securities after it announced plans for a substantial restructure, as it was considering another round of at least 50 redundancies as well as the resignation of recently appointed CEO David Nenke, a former Amazon and Barnes and Noble Executive.