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Receivers Appointed To Eastern Hi Fi

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Jan 14 NZPA - NZAX-listed Eastern Hi Fi is in the hands of receivers after saying it could not rid itself of leases on unused premises.

Michael Stiassny and Brendon Gibson of KordaMentha were appointed as receivers to the company, which has retail stores and a distribution business for home entertainment brands.

Businesswire reported Mr Gibson saying creditors were owed about $4 million. The receivers were assessing how to proceed.

It has stores in Auckland's Khyber Pass Rd, another in Wellington, and its original store in Howick in Auckland.

It had empty stores in Mt Eden in Auckland and in Palmerston North and had spare warehouse and office space in Mt Wellington.

Its wholesale business is called Avalon Pacific Marketing.

"After all of the steps taken during the past year the company reduced its operating expenses in a satisfactory manner but it has not been able to rid itself of the leases of unused and slightly used premises which are now redundant in the company's hands and cause unprofitable trading," a statement from the directors said.

"As the issue made by the company during 2009 was not filled, the funds then obtained to give time to turn around the business operation and quit the leases have now been used and so the directors have no ability to continue the company trading in such circumstances."

The directors asked ASB Bank, as the first charge holder over the assets of the group, to appoint receivers to each of the companies in the group.

Stock exchange operator NZX said it had suspended trading in the shares of Eastern Hi Fi. Shares in the company last traded at 8c on Tuesday, down from a year high of 13c last June.

For the half year to the end of June the company reported a loss of $979,761.

Eastern Hi Fi's website said the company opened its first store 30 years ago in Howick.

Rick Bettle stepped down as chairman in 2009 and was replaced by Denham Shale.

NZPA

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