OzCar’s major shareholder Optimus Group moving to protect its investments after an external investigation.
Australian used-car retailer OzCar has entered voluntary administration, with 90 employees made redundant and four company-owned dealerships closed immediately.
Glen Kanevsky and Jason Tracy of restructuring firm Alvarez & Marsal have been appointed as voluntary administrators by the company’s secured creditor.
The closures affect company-owned sites in Lansvale, Penrith, Cardiff and Gosford, all in New South Wales.
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OzCar sells used vehicles through company-owned dealerships and independently operated franchises.
Its 12 independently owned franchise dealerships will continue trading while administrators review the business.
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Administrators review OzCar operations
In a written statement provided to SmartCompany, Kanevsky said the administrators have begun reviewing the business.
“Our immediate focus is to understand the financial position of the business, engage with key stakeholders and assess the options available as part of the voluntary administration process,” Kanevsky said.
“As an immediate step, we have made the difficult decision to close four company-owned sites at Lansvale, Penrith, Cardiff and Gosford.”
“Importantly, closures impact corporate owned sites only. The 12 franchise sites continue to operate on a business-as-usual basis,” he said.
“Franchised locations are independently owned and operated, and OzCar will continue to support the franchisee network while our initial investigations are underway.”
Financial troubles and customer uncertainty
The administrators have not disclosed OzCar’s total debts. However, Japanese automotive group Optimus Group, which holds a 30% stake in the company, cited poor financial performance and corporate governance concerns as factors behind the administration.
“We understand our appointment will create a level of uncertainty for customers, and we are committed to working through these issues to the extent possible,” Kanevsky said.
“It is too early to comment on the likely outcome of the process, but we will provide further updates as appropriate.”
SmartCompany sought further information from the administrators about OzCar’s financial position and the implications for franchisees and customers.
OzCar was also contacted directly but did not respond at the time of publication.
Customers with enquiries about existing purchases, warranties or servicing have been directed to contact the administrators at ozcar@alvarezandmarsal.com.