LIQUIDATION seems to be the most likely outcome for struggling national weight loss company, The Metabolism Centre.
The company owes between $6.5 million and $7 million and its debt pressure is becoming increasingly apparent as rent bills for its 17 centres fall due.
Administrator Mark Reilly, who became personally liable for the rents on those centres on January 24, told a creditors’ meeting that several premises were being vacated because their landlords would not hold off on rent demands.
All of the company’s centres have been closed due to a lack of funds.
The Metabolism Centre’s major asset is debtors of $100,000, however Mr Reilly said the chances of recovery from those debtors was slim.
He and fellow Featherby Reilly partner, Glen Featherby, were appointed administrators of the Metabolism Centre on January 16.
Mr Reilly said a deed of company arrangement was not likely, given the low amount of cash the company had on hand.
“We are severely hampered by a lack of funds,” he said.
The administrators have so far discovered that the company has plant and equipment with a full value of $1.3 million, including premises fit-outs although a full recovery on that is unlikely.
Employee entitlements total about $350,000.
Metabolism Health, the Australian Stock Exchange-listed parent of The Metabolism Centre, is owed $4.4 million.
That company is also in administration, just weeks after it listed on the ASX, raising $2 million from investors. The administrator appointed is Brian McMaster from Ernst & Young.
Unsecured creditors, including the Australian Tax Office, are owed about $2 million.
A report to creditors is due by February 6 and another creditors’ meeting is due one week later.