Jaycar Chase Credit For Crack At Dick Smith As Senate Inquiry Goes Ahead
Jaycar, is believed to have approached the National Australia Bank with a proposal to take over select Dick Smith stores while also facilitating the acquisition of stock.
ChannelNews has been told that the plan involves only taking on Dick Smith stores that are not in shopping malls or stores that are tied to long term leases with shopping mall operators.
Jaycar management who successfully operate stand along stores in low cost locations is believed to be seeking a $50M line of additional credit.
The Jaycar move comes as South Australian Senator Nick Xenophon the prolific creator of Senate inquiries and a person who loves to generate self-publicity, now wants to hold an inquiry into the collapse of the mass retailer.
This is the same Senator that is trying to establish a new political party ahead of the next election and as the Financial Review pointed out today, this is the also same Senate Inquiry approach that investigated Credit Card payments that resulted in the 118-page Senate credit card inquiry report sinking without trace on December 17.
The concept of a Dick Smith inquiry gained the bipartisan support of the Senate last week, it is due to report back by May.
Xenophon has now told the Financial Review that it does not make sense for the Senate to inquire into the Dick Smith collapse and try to report on its findings three months before the administrator, Joseph Hayes from McGrathNicol, delivers his report including recommendations on possible action by the Australian Securities and Investments Commission (ASIC).
Xenophon said he would be willing to extend the term of the inquiry until after the company’s administrators have submitted their report to creditors.
The inquiry is set to probe “the conduct of private equity firms prior to, during and after corporate takeovers” and “the role of ASIC in overseeing corporate takeovers”.
Tony Boyd at the Financial Review claims that the first question the Senators should ask Anchorage is about the accounting standards that force accounting adjustments when an acquisition is made in order to reconcile the price paid to the accounting value of the assets.
He also suggests that it might be useful asking Woolworths how they accounted for inventory before the business was sold to Anchorage. Chanticleer understands that Woolies used to take to its profit and loss account all the rebates it received from suppliers.
In other words Woolies was reporting profit numbers for inventory before it was even sold.