The directors of collapsed kitchen appliance maker Kleenmaid have posted a video on YouTube explaining why the company was placed in administration and confirming that they plan to try to resurrect the business through a deed of company arrangement.
Co-founders and directors Andrew and Brady Young describe the two minute video, which is squarely aimed at disgruntled Kleenmaid customers, as an “address to the nation”. (The video is pictured below, although embedding the video has been barred.)
Bradley Young says the decision to place the company in voluntary administration was “the result of the enormous impact the global financial crisis has had upon the Kleenmaid group of companies”.
“Over the past six months we’ve experienced a significant downturn of sales of 25%,” he says. “In addition, gross margins have been affected by the weakening Australian dollar.
“Unfortunately in the present economic circumstances, all attempts to find additional financial support have been unsuccessful, leaving us to appoint Deloitte as voluntary administrators.”
Andrew Young says voluntary administration will allow the company “to take time and assess all available opportunities, to satisfy the needs of all stakeholders, including you, our valuable customers”.
“Be assured we are doing all that we can to minimise the impact on all affected.”
Young confirmed that the directors were working with the administrators to devise a deed of company arrangement that would allow the business to resume trading, subject to restructuring.
Any DOCA would need to be approved by a majority of creditors, including Kleenmaid customers.
“Incorporated within any deed will be terms that will protect the interests of you, our customers,” Andrew Young says on the video. “We assure you the process is painful for us and our team as it is for you.”
Andrew Young also said the directors and administrators will continue to post updates on YouTube as the administration process continues.
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•· Kleenmaid collapse hits 10,000 creditors
•· How to survive insolvency – and prosper
•· How do I know if my business has real cashflow problems?
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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