Davex Australia trading as Davis Lighting - Case Update

David McGrath, Benjamin Campbell and Kelly-Anne Trenfield of FTI Consulting, the joint administrators of Davex Australia trading as Davis Lighting, have revealed the reasons behind the Queensland-based lighting company’s difficulties and provided an update on their progress.

The company had been trading at a loss for a number of years and was reliant on funding from its parent, Davex Malaysia. The company also had access to trade finance facilities and a business overdraft provided by Westpac.

In late 2023, Westpac withdrew its support of the company and cancelled the facility, causing the company to have to repay c.$1.6 million to Westpac over the course of Q4 2023 and Q1 2024. Davex Malaysia determined it would not provide further funding to make up for the lost liquidity, and the company entered voluntary administration on 18 January.

Following their appointment, the joint administrators continued to trade the business and commenced a parallel sale process, resulting in the execution of an asset sale agreement with a party whose identity has yet to be disclosed. The deal, which is expected to complete within two weeks, also provides for the transfer of all employees to the purchaser, materially reducing priority employee entitlement claims. The joint administrators are not currently in a position to determine whether unsecured creditors will receive a dividend.

Read their report here.