Foodora just put its Australian business into voluntary administration

Foodora/Facebook

Global food delivery business Foodora has sent its Australian business into voluntary administration ahead of its exit from the country.

The move comes just a fortnight after the business announced it was quitting the Australian market by August 20, claiming at the time that the business was solvent.

The business today appointed Simon Cathro and Ivan Glavas of Worrells Solvency and Forensic Accountants as Voluntary Administrators, effective immediately.

The move comes three days before the business was due to terminate its agreements with delivery riders.

Today, in a statement Worrells said: “While Foodora’s intention was to wind down its affairs in Australia in an orderly fashion and with the support of its parent company to meet all known liabilities, the company has been faced with significant external challenges. These have impeded the company’s ability to implement a solvent wind down of its affairs.”

The move comes as the Australian arm of the German business Delivery Hero SE, faces a range of legal challenges, including an unfair dismissal case in the Fair Work Commission and allegations by the employment watchdog, the Fair Work Ombudsman (FWO), that the company engaged in sham contracts for delivery drivers

The FWO case is due back in the Federal Court on September 4.

In its statement Worrells said that Foodora “to the best of its knowledge”, had met all payments due to creditors, specifically employees, restaurants and contract riders.

“The voluntary administration process offers the company essential breathing space, including a statutory moratorium on claims against the company, with a view to ensuring that the affairs of Foodora are administered in a way which results in a better return for creditors of foodora than would result from its immediate liquidation,” Worrells said.

Berlin-based Foodora launched in Australia in March 2016 after acquiring a local delivery business, Suppertime, in late 2015 and rebranding it. The business operated in Sydney, Melbourne and Brisbane, fighting a four-way tussle in the food delivery sector with Uber Eats and the UK businesses Deliveroo and Menulog.

The collapse of the business comes just eight months after local founder and CEO Toon Gyssels, who is now focused on the Delivery Hero business (Foodora’s parent company) in the UAE, said the biggest challenge the company faced in Australia was “the sheer pace of our growth”.

Worrells said creditors will be updated on the financial affairs of the company at the first meeting of creditors, which is due to be held not before 29 August, 2018.

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