Dick Smith Will Be Liquidated If Chinese Deal Falls Through.
The Dick Smith retail group will be placed into liquidation today if a deal with Chinese retail group 5 Star is not ratified claims insiders.
ChannelNews has been told that 5 Star who on Monday made a none binding offer has been “haggling” with Ferrier Hodgson and the banks that are owed over $130M over the purchase price.
The Company is concerned about the amount of money that will be needed to restock the stores, whether manufacturers who have lost over $100M in the collapse of the retailer will support them.
They are also concerned about the information they have been given and are keen to conduct their own audits, as a great deal of the stock left in the stores are house brand products that are not selling, or old branded stock that is about to be replaced with new models at stores such as JB Hi Fi and Harvey Norman.
Internally Ferrier Hodgson management are keen that the banks accept a 5 Star deal as the business is bleeding around $3-4M a week with the receiver now facing the real possibility that they are going to have to liquidate the Company or have the NAB and HSBC banks inject further capital.
An announcement relating to the 5 Star deal was due today.