A Victorian-based caravan manufacturer has agreed a deal to buy Zone RV, the company that went into administration late last year.
The transaction, scheduled to be completed on March 6 will see the business continue operating under the ownership of Essential Caravans.
Administrator Cor Cordis says the new owner brings established industry capability, and intends to incorporate Zone RV’s premium Australian-made product offering alongside its existing caravan operations.
Rahul Goyal from Cor Cordis said maintaining trading operations during the administration was critical to preserving value.
A buyer has been found for luxury caravan manufacturer, Zone RV. PIC: Dozza
“Continuing to deliver caravans was the right strategy. Shutting the business down on day one would have been a poor outcome for customers, employees and creditors,” he said. “Since the start of the administration, 41 caravans have been delivered, with a further two planned for delivery this week.”
Mr Goyal said the transaction demonstrates the benefits of a going-concern strategy.
“At Cor Cordis, our approach is centred on preserving enterprise value, maintaining operations where possible and achieving outcomes that balance the interests of creditors, employees, customers and the broader community, ” he said. “The sale of Zone RV ticks all the boxes”.
However, it seems that many of the customers who had paid money to Sunshine Coast-based Zone RV before it went into administration could lose out.
The ABC reports that customers may only get a few cents on the dollar through the liquidation process once the administrators, secured creditors and former employees are paid. It says, in a liquidation, customers are classified as unsecured creditors and rank last on the priority list, along with suppliers.
Essential Caravans director Jamie Johnson told the ABC that while he felt ‘sick in the stomach’ for customers who lost money, he could not carry their debt but could offer affected customers new caravans at cost price.
“It just wasn’t possible to keep the business alive and take on the obligations for the customers,” he said. “Some of them we can accommodate fully, but some of them have obviously paid a substantial amount and the business just can’t sustain being able to absorb that going forward.”
Mr Johnson told the ABC he would contact affected customers ‘the minute I’m allowed to under the agreement’.
Sadly, Zone RV is not the first Australian caravan firm to go to the wall in recent years.
# Do you think more has to be done to protect RV-buying customers from situations like this? Comment below.
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