Booktopia $60m in debt as insolvency claims probed

The company collapsed this month, with bosses rejecting suggestions that it was trading while insolvent.

Aussie online retailer Booktopia insists it was at all times trading in line with insolvency laws, as administrators continue to pore over its books.

Administrators said the company could be as much as $60m in debt on Monday, the first day creditors have met since the bookseller collapsed less than two weeks ago.

The ABC reported administrators would also investigate whether Booktopia, which had ambitions to rival US behemoth Amazon, could have been trading while insolvent.

Booktopia was placed into voluntary administration this month.

In a statement to the ABC, Booktopia said the company has “at all times complied with the law in relation to insolvent trading”.

“Booktopia had advanced discussions with shareholders and brokers in relation to a capital raising,” it said.

The ASX-listed retailer went into voluntary administration this month following a trading halt on the stock market.

Booktopia first traded at $2.86 a share in 2020, but lost more than 98 per cent of its value and shares were just $0.05 on June 17.

Australia’s largest bookseller recorded a $16.7 million loss for the six months to December 31.

It had also recently laid off 50 staff and its former CEO resigned after spending less than a year in the role.

Booktopia told investors in February that its former CEO’s departure was one of many changes it was implementing after a review of operating costs.

Booktopia was billed as a major Aussie success story.

Administrators Keith Crawford, Matthew Caddy and Damien Pasfield from restructuring firm McGrathNicol have been “urgently” looking into the business.

“The Administrators are undertaking an urgent assessment of Booktopia’s business while options for its sale and/or recapitalisation are explored,” a July 3 statement read.

They have reportedly sacked 165 staff, with just 18 people remaining at the company, according to the Sydney Morning Herald.

Booktopia, started in 2004, sold more books than any other Australian company.

It now owes publishers and customers millions of dollars, with an estimated 150,000 unfulfilled orders and $3m in unused gift cards, according to the ABC.

Creditors are awaiting news on the process ahead.

Last month Booktopia requested the ASX pause trading because of a “pending” update to shareholders.

That update was that the business had gone into voluntary administration.

“The shares of Booktopia Group Limited (Administrators appointed) will remain suspended from trading during the administration process,” McGrathNicol said this month.

“Shareholder updates will be uploaded to the ASX platform as required.”

The administrators have also said it would not offer refunds or honour gift cards at this time, saying transactions prior to July 3 represent an “unsecured claim against Booktopia”.