Booktopia Group Ltd (ASX:BKG) will retain existing employees and recruit additional staff after administrators, McGrathNicol, announced the completion of the sale of the beleaguered business’s related assets to Shant Kradjian, the owner of online camera store digiDirect.
The Booktopia website resumed trading on Friday evening.
digiDirect is a prominent Australian omnichannel consumer electronics retailer with a strong national presence in stores and online.
The ability to immediately resume trading is a crucial development for Australia's publishing industry. The purchasers intend to hire more than 100 employees, encouraging former Booktopia staff to return.
This sale, facilitated by McGrathNicol’s Deals team, was supported by Moneytech, Booktopia’s secured creditor, which provided the necessary funding to maintain business operations pending the sale.
“Booktopia has been a key part of Australia’s publishing industry for 20 years and transitioning the business to such a well-known Australian retailer is a great outcome for all stakeholders,” McGrathNicol’s Keith Crawford said.
“We commend digiDirect’s owner Shant Kradjian and his team, who moved quickly and professionally to complete due diligence and the transaction in collaboration with the administrators and Booktopia’s staff and key suppliers.
“We extend our thanks also to key stakeholders who supported the completion of the transaction, including Booktopia staff, Moneytech and our legal advisors Arnold Bloch Leibler.”
The sale price will not be adequate to generate a return for shareholders. With the transaction now complete, the administrators will proceed to arrange the second creditors' meeting for Booktopia, with further details to be announced separately.
Interest shown despite numbers
Prior to the sale, Kogan.com and Brisbane-based QBD Books expressed interest in the "urgent" sale of the online bookseller.
Booktopia faced a challenging 2022-23 financial year, reporting a net loss of A$29 million, with revenue declining by 18% to A$197.6 million.
The situation further deteriorated, with the company in February lowering its full-year EBITDA forecast from A$13.5 million to just A$1 million to A$3 million.
This decline preceded the company’s decision to enter voluntary administration in July, leading McGrathNicol to seek urgent proposals for purchase or recapitalisation.