Struggling online bookseller Booktopia collapses

Booktopia has entered voluntary administration after the online bookstore was unable to secure additional funding to sustain its loss-making operations.

Three partners of McGrathNicol Restructuring have been appointed voluntary administrators and are undertaking an urgent assessment of the company while options of a sale or recapitalisation are explored.

Booktopia suffered a $16.7 million loss for the six months to December 31, compared to a $3.9 million loss a year ago.

Its shares have not traded on the ASX since June 13 while it was attempting to secure additional funding.

The company has said that economic headwinds and the continued soft performance of the Australian book market had diminished its core business which was selling books via two websites, Booktopia.com.au and angusrobertson.com.au.

Both remained operational on Wednesday.

The bookseller announced on June 3 that its chief executive was departing, it was withdrawing its earning forecasts and was borrowing $1 million at an 18 per cent interest rate to pay for 50 redundancy packages for workers at its headquarters in the Sydney suburb of Rhodes.

The plan had been to issue $400,000 in shares to secure the debt facility from AFSG Capital and pay $200,000 in shares when it first borrowed from it.

But Booktopia abruptly said last Friday that the revolving debt facility had been cancelled and those fees were no longer payable.

A transition to a new $12 million robotic warehouse in the Sydney suburb of South Strathfield that opened last year had also been plagued with difficulties and had not resulted in the cost savings the company had expected.