Bill Express Limited (BXP) has appointed administrators after a subsidiary of Al Othman Group backed off from a proposed recapitalisation of the company. Bill Express subsequently approached its financiers, advisers and suppliers but failed to garner support.
The news saw more than 3000 newsagents across the country crippled in their ability to process bill payments or pre-paid mobile purchases, according to a report in the Sydney Morning Herald.
This morning, BXP advised the market that it had secured an extension to its standstill agreement with financiers and key suppliers until 22 August 2008.
However, the company subsequently announced that Al Othman Group had decided against providing an additional capital injection and restructuring the company.
“The proposal was to include a substantial capital injection and new bank guarantees combined with a restructuring of the existing liabilities of the Company,” Bill Express said.
“In addition, the board and management of the company were to be substantially restructured.”
With the withdrawal of the AL Othman lifeline, Bill Express said it was meeting with advisors and urgently considering the implications of this withdrawal.
The company said it was also in discussions with its financiers and major suppliers on the impact of this decision on the standstill agreement and the supply arrangements, which those stakeholders had provided.
However, the company came out of the meeting with little disappointed, advising that it would by placed in administration.
“The suppliers and financiers indicated to the company that in these circumstances they are not willing to continue the standstill arrangements or otherwise support the company’s continued trading,” the company said.
“The directors have therefore resolved to appoint administrators to the company which will take effect today.”
Bill Express shares remained suspended at 4c.