THE scale of the STA Travel collapse was laid bare last month with the formal Report to Creditors from the company’s Deloitte administrators which estimated a shortfall of $66.8 million, owed to a whopping 37,000 creditors. Some of that huge sum relates to the $14 million fine exacted by the Australian Competition and Consumer Commission earlier this year in connection with misleading and deceptive conduct around the STA MultiFLEX pass product, but much of the rest looks to be in the form of prepaid and lay-by holidays deposited by travellers who have now become unsecured creditors in the company’s failure.
Helloworld Travel’s dramatic write-down of the value of its TravelEdge acquisition last month became more explicable through the STA report, which confirmed that TravelEdge was the 40% shareholder in a company called STA Travel Academic which has also been placed into administration. The report also found that despite average annual TTV of about $45 million over the last few years, STA Travel had made minimal profits, with the Administrators saying the company’s “high fixed operating cost structure” was an impediment to its performance.
The administrators have recommended the company be placed into liquidation, as they deal with a complex web of claims and counter-claims with major debtors and creditors including IATA which is estimated to owe STA $9.3 million, and Contiki with a claimed $2.3 million STA debt.