A travel agency that was turning over approximately $2 million annually has collapsed into voluntary administration after a proposed merger fell through.
The travel divisions of Round the World Experts Pty Ltd and RTWexperts Pty Ltd entered voluntary administration on May 9, with Timothy Mableson and Martin Lewis of Ferrier Hodgson appointed to manage the companies.
A spokesperson for Ferrier Hodgson told SmartCompany the travel divisions of the companies ceased trading just prior to the appointment of administrators, however, the companies also operate a web design and app development business, which is continuing to trade.
The spokesperson also confirmed the travel divisions of the companies did not have any employees at the time of their appointment as that arm of the business had already ceased trading.
Based on historical financial records, Ferrier Hodgson said the companies were had annual turnover of more than $2 million.
While there are similarly named travel businesses in other countries, such as roundtheworldexperts.co.uk in the UK, the administrators said these businesses have no relationship to the companies that are in administration and are therefore not subject to their appointment.
According to Ferrier Hodgson, a decision not to proceed with a planned merger with a “Queensland-based group” was one of the key factors that led the companies entering voluntary administration.
“Around October 2015 the companies entered into a merger arrangement with a Queensland-based group. The reason for entering into the merger arrangement was that the companies considered there would be both revenue growth opportunities and potential cost savings to improve the companies’ financial position at the time,” the spokesperson says.
“For a variety of reasons the companies did not achieve the potential financial benefits of the merger arrangement that were expected at the time of entering into the arrangement. Consequently, both the companies and the merger partner in Queensland concluded that both parties should continue but as separate businesses.”
Ferrier Hodgson said the parties to the merger agreed to a separation arrangement in the days immediately preceding the appointment of voluntary administrators.
Sale campaign kicks off
A sale campaign is now underway for numerous trademarks, domains, business and company names owned by the companies in both Australia and international jurisdictions.
According to the RTWexperts website, 22 domain names associated with the Round the World Experts businesses are currently on offer, along with two companies, four business names and eight social media accounts.
Another 28 travel-related domain names are also being advertised for sale via the website.
The administrators said there may be some customers of Round the World Experts and RTWexperts who will not be able to recover funds paid for travel bookings.
“Because the travel division of the business has ceased trading, the companies are not able to complete their bookings or refund amounts paid to customers,” says the spokesperson for Ferrier Hodgson.
“All travel customers with outstanding and unfulfilled bookings – where tickets have not been issued – have been notified and the relevant travel agencies and wholesale partners (for example Groupon, Our Deal or Living Social) associated with the respective booking are working the voluntary administrators to minimize the impact to these customers.”
Ferrier Hodgson said customers who have paid money to the companies but have outstanding or unfulfilled bookings can lodge a claim against the companies as a creditor.