Receivers have agreed to a rescue deal for Barbeques Galore, but creditors will take a significant hit as the barbecue retailer restructures. The deal, announced on Thursday, will see the company continue trading under new ownership, but unsecured creditors are expected to receive only a fraction of what they are owed.
Rescue deal details
The receivers, appointed in March, have accepted a proposal from a consortium of investors to acquire the business. The deal will preserve jobs at the company's stores and headquarters, but it leaves many suppliers and other creditors out of pocket. The consortium, which includes existing management, will inject fresh capital into the business to stabilize operations.
Creditor impact
Unsecured creditors, including suppliers and landlords, are expected to receive less than 10 cents in the dollar. Secured creditors, such as banks, will recover a larger portion of their loans but still face losses. The receivers said the alternative was liquidation, which would have resulted in even lower returns for all parties.
Barbeques Galore, which has been operating for over 30 years, fell into financial difficulty due to rising costs and changing consumer habits. The company had been struggling with increased competition from online retailers and discount chains, as well as higher rent and labor costs.
Future outlook
The new owners plan to close underperforming stores and focus on online sales. They also aim to expand the product range to include outdoor furniture and accessories. The company's 500 employees have been assured that their jobs are safe under the new ownership structure.
The deal is expected to be finalized within the next two weeks, subject to court approval. Creditors will vote on the proposal at a meeting scheduled for next month.
