Embattled retailer Oroton has been thrown a post-Christmas lifeline after one of its major shareholders offered to take over the company.
OrotonGroup’s administrator Deloitte has accepted a purchase proposal from fund manager Will Vicars, who owns 18 per cent of Oroton’s ASX-listed shares.
In addition, Deloitte has entered into a binding implementation deed with a company controlled by Mr Vicars.
This deal should see Oroton avoid a break-up of its business and allow its 50 stores across Australia, New Zealand and Malaysia to continue trading.
However, the administrator has not revealed the value of the deal or how much creditors can expect to receive.
“Despite interest, there was no other offer that would have resulted in a superior outcome for the business or employees,” said administrator Vaughan Strawbridge from Deloitte.
“Our objective has been to avoid a break-up or closure of Oroton, preserve employment and as much of the Oroton business as is viable, whilst achieving a value maximising result for stakeholders.”
Mr Strawbridge also said entering into this agreement is “an important first step” in Oroton’s recapitalisation.
Oroton entered into voluntary administration in late November.
This was after the luxury fashion accessories company issued a series of earnings downgrades earlier this year, and reported a loss of $14.2 million for the last financial year.
It was also the latest bricks-and-mortar retailer to be plagued with financial difficulties — following the collapse of Payless Shoes, Marcs, David Lawrence, Herringbone and Rhodes & Beckett over the past 18 months.
The deal also marks the end of an era for the Lane family, who founded the business in 1938 and have been its owners since then.
Oroton shares are currently suspended from trading on the ASX.
They last traded at 43.5 cents per share, which is more than an 80 per cent plunge from its price this time last year ($2.23).