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Borders Books Australia $118 million in Debt

After the collapse of the Borders books franchise, administrators in Australia have revealed that the company had only $1 million cash in the bank and group entitlements owed to staff of $7.8 million. Administrators Ferrier Hodgson told creditors this morning, that owners of Borders, the REDGroup, had $6.4 million in cash when it went into administration and debt of at least $118 million.

Unfortunately it is presumed administrators will look at closing stores, as all the company has is limited cash in bank, according to Steve Sherman of Ferrier Hodgson. The cause of the problems for the REDGroup included the massive debt, plus problems competing with online retail business, and changing market dynamics.

Mr Sherman also indicated that if stores were to be closed prior to the company going into administration, creditors should know within 72 hours which stores they will be. Creditors owed include publishers, publications, Westfield, and suppliers.

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Business Desk
Editors and staff from the Business Desk at The Global Herald.

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