Booktopia has filed for voluntary insolvency after the online bookstore failed to raise additional funds to sustain its loss-making business.
Three partners from McGrathNicol Restructuring have been appointed as voluntary administrators and are undertaking an urgent valuation of the business while options for a sale or recapitalisation are considered.
Booktopia suffered a loss of $16.7 million in the six months ended December 31, compared with a loss of $3.9 million a year earlier.
While the company attempted to raise additional funds, its shares have not traded on the ASX since June 13.
The company said economic headwinds and continued weakness in the Australian book market had impacted its core business of selling books through two websites, Booktopia.com.au and angusrobertson.com.au.
Both were still in operation on Wednesday.
The bookseller announced on June 3 that its chief executive was leaving the company, withdrawing his profit forecasts and borrowing $1 million at an interest rate of 18 percent to pay 50 severance packages for employees at its headquarters in the Sydney suburb of Rhodes.
The plan called for issuing $400,000 worth of stock to secure AFSG Capital’s line of credit and repaying $200,000 worth of stock upon the initial borrowing.
But Booktopia abruptly announced last Friday that the credit line had been canceled and the fees were no longer payable.
The transition to a new $12 million robotic warehouse in the Sydney suburb of South Strathfield, which opened last year, was also plagued by difficulties and did not deliver the cost savings the company had expected.