Voluntary administration and recapitalisation of Toys “R” Us
Voluntary administration and recapitalisation of Toys “R” Us
| Client | Toys "R" Us ANZ Limited and associated entities |
| Industry | Retail |
| Services provided | Voluntary administration, recapitalisation through a Deed of Company Arrangement |
Key learnings
- Voluntary administrations can facilitate the revitalisation and reset of a business
- Early intervention and stakeholder engagement are critical to preserving brand value and maximising creditor returns
- Expert-led restructuring can unlock pathways to recapitalisation and long-term sustainability.
BDO was appointed as the voluntary administrator of Toys “R” Us ANZ Limited and its associated entities following a failed expansion into the UK and other operational challenges that led to a significant cash drain. The companies were unable to meet operational requirements and service debt, prompting the need for urgent restructuring.
We provided business restructuring services, including:
- Voluntary administration and financial assessment
- Operational stabilisation and cashflow management
- Supplier contract review and financial reporting enhancement
- Investor engagement and sale process coordination
- Asset valuation and stakeholder management.
Strategy and restructuring path
BDO implemented a comprehensive turnaround strategy:
- Conducted an urgent assessment of the company’s financial position
- Continued trading operations to preserve brand and business value
- Stabilised operations and conserved cash through contract reviews and reporting improvements
- Sought Expressions of Interest (EOI) for majority ownership
- Engaged independent experts to assess stock and assets
- Worked closely with legal advisors and the secured lender throughout the process.
Outcome
The administration process resulted in:
- A successful sale of the business
- Court approval to sell shares in Toys “R” Us ANZ Limited
- Continuation of trading and preservation of the brand in Australia
- Unsecured creditors receiving a return they would not have received in a liquidation scenario.