EXCITE Holidays was “severely undercapitalised” prior to its collapse earlier this month, with Administrator Morgan Kelly from KPMG yesterday revealing up to $35 million is owed to creditors of the firm (TD breaking news).
About 60 people attended the official First Meeting of Creditors, where Morgan laid out his team’s preliminary conclusions in relation to Excite, with no return to unsecured creditors expected.
KPMG is currently undertaking a “recapitalisation sale program” attempting to realise the value of Excite’s assets, with Morgan confirming significant interest in the Excite reservations platform.
However, there is less than $100,000 in the company’s local bank accounts, with KPMG also paying a few staff in an attempt to keep the back end operating in order to facilitate a sale of assets.
He confirmed that Excite owned its Sydney headquarters but has a $10.8 million loan outstanding to the National Australia Bank which is secured by the CBD property.
The office is currently in the process of being sold, and Morgan said it’s expected the proceeds will pay out NAB.
KPMG is taking legal advice on the status of overseas creditors, including agents in New Zealand, because Excite had entities with a host of service agreements and bank accounts across the globe including in NZ, Singapore, the US, UK, Canada and Greece.
Morgan read a statement from directors Nicholas Stavropoulos and George Papaioannou, expressing “deep regret” for the collapse and citing the market’s “increased caution in dealing with non-ATAS channels following several high profile collapses in the travel industry”.