Customers and creditors of the collapsed STA Travel have been filled in on the company’s dire financial state by its local administrators.
Jason Tracy and Tim Norman of Deloitte Australia were appointed voluntary administrators of STA Travel Group (made up of STA Travel Pty Ltd, STA Travel Academic Pty Ltd and IEP Pty Ltd) on Friday after its parent company filed for insolvency last week.
An update on STA Travel’s Aussie website said the administrators have commenced an “urgent” assessment of the financial position of the companies to determine the viability of a recapitalisation, sale and/or asset realisation strategy.
“We will continue to work with STA Travel Group management and its overseas administrators to seek the best outcome for customers and creditors,” it said.
“STA Travel Group operates as a global group, and its operations are complex. Customer deposits, for example, are in many cases not held in Australia, and third-party companies overseas are also involved.
“This is a challenging situation, and the administrators are investigating possible options (if any) available to customers to allow them to recover any pre-paid bookings or continue their travel plans.”
The update noted that access to STA Travel personnel was not possible for customers, given all Australian STA Travel stores and its call centre were closed prior to the appointment of administrators and its website is down (although it still appears to be working for Travel Weekly).
“In the interim, customers holding bookings should contact their airline, hotel or tour operator regarding the status of their bookings,” it said.
“You can also consider contacting your credit card provider if travel bookings were paid by credit card.”
A freeze has been placed on the payment of amounts due to creditors of STA Travel Group for debts incurred up to the date of the appointment of the administrators while they explore the available options.
The administrators will hold an initial meeting of creditors within the first eight business days from their appointment. The purpose of this meeting will be to provide information to the creditors on the process and confirm if creditors wish to form a committee.
The administrators then have to investigate the affairs of the companies and report back to creditors and employees on their findings. They will also make a recommendation to creditors regarding the future of each of the companies.
The second meeting of creditors is expected to be held within 25 days of the administrators’ appointment, but may be extended by the court if the administrators think an extension is in the best interest of creditors.