UPDATE 1-NZ's Postie Plus put in administration, shares suspended

Mon Jun 2, 2014 5:50pm EDT

Related Topics

* Postie Plus calls in administrators

* Company's bank refuses to keep financing losses

* No new capital, shareholders found (Recasts, adds administrators, NZX suspension, background)

WELLINGTON, June 3 (Reuters) - New Zealand clothing retailer Postie Plus Ltd was put into voluntary administration on Tuesday after its bank said it would not keep financing its losses and the company could not find any source of significant new capital.

Postie Plus, which had been on a trading halt, said it had appointed PricewaterhouseCoopers as administrators to run the company while looking to either sell the company as a whole or in parts.

"The board has not been able to find a party to immediately inject a substantial amount of new capital. The board has therefore determined that the company cannot continue to carry on its business," the directors said in a statement.

Postie Plus has been struggling with weak sales and reduced market share, as well as added costs from a business restructuring, which has seen it in breach of its banking agreements.

"The company's bank has been supportive through this period, but has decided it cannot extend its facilities further to cover ongoing losses," it said.

No estimates have been given of the company's capital needs.

The administrators said the company's 82 shops would stay open and trade normally while options were considered.

The NZ stock exchange said the company would be suspended from trading until further notice. Its shares last traded at 7.3 NZ cents before it was put on a trading halt last week.

In April, the company reported an increased first half loss on lower sales as it looked to cut its costs, and it was forecasting a full year loss.

Postie Plus had already sold a school uniforms business and used the proceeds to repay debt, but needed to renegotiate its banking arrangements by the end of July. (Gyles Beckford)

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