Aussie disties owed millions after Esel filed for voluntary administration

Companies affected include XIM Distribution and Dicker Data.

Esel, the ex-parent company to reseller Mwave, reportedly owes more than $18 million to several major Australian distributors following the company filing for voluntary administration last month.

Those distributors allegedly owed money include, Dicker Data, Ingram Micro, XIM, Leader, Synnex, MMT, and Centercom.

CRN Australia understands some of those distributors are owed sums of up to $3.6 million.

On June 25, ASIC held the first meeting for creditors of the company where the specific amounts were revealed to the creditors.

Multiple sources familiar with the matter and present on the call told CRN Australia that during the creditors' meeting the administrators reportedly said several of these companies do not have creditors' insurance.

One distributor is allegedly owed $3.6 million and does not have insurance.

Several creditors declined to comment, however Dicker Data, XIM and MMT confirmed that they are owed money by Esel.

Since buying Mwave, a DigiDirect spokesperson told CRN Australia that the company is in early stages of conversations as they work through the administration process.

“We have been pleased with support we have received to date, transactions have taken place for new stock with a focus on fulfilling customer orders and demand, and we look forward to continuing this progress in the coming weeks,” they said.

After Mwave’s ex-parent company, Esel filed for voluntary administration last month, the company announced its purchase by the DigiDirect Group which also owns the previously defunct Booktopia.

CRN Australia understands Mwave was acquired by DigiDirect Group for $500,000. DigiDirect Group declined to confirm the number and directed the publication to speak to the insolvency firm managing the matter, DVT Group.

“It is our understanding that the administrators revealed details of a portion of the deal,” a spokesperson for DigiDirect Group told CRN Australia.

“The transaction for the company was based on more than only goodwill for the brand, database, software, plant and equipment, which were all based on assessments of two independent valuations that determined fair value.

“The transaction also included staff entitlements rolling over to the new ownership, and since administration, a commitment to fulfil prepayments of customer orders, gift cards and warranties - all of which amount to millions of dollars in value.”

According to the DigiDirect spokesperson, they have told the administrators they are interested in acquiring in all stock in their possession following Esel's entry into voluntary administration.

“We are willing to negotiate and purchase all stock at fair and negotiated value with those who affirm ownership of said stock,” they said.

Eyebrows in the channel community were raised when the news of the acquisition of Mwave by DigiDirect happened a day after Esel filed for voluntary administration.

The spokesperson did not comment on when they began discussions of DigiDirect Group acquiring Mwave but said they have held a “long-standing” interest in the business.

“Talks were held initially with Mwave's previous majority shareholders and more recently, with their founder and majority shareholder. Conversations progressed very recently and reached a final agreement,” they told CRN Australia.

Mwave, calling itself Australia’s biggest online tech retailer, has been a stalwart in the industry for more than 15 years.

The company sells gaming PCs, laptops, components and peripherals, software licenses and other PC-related products.

CRN Australia has reached out to DVT Group for comment.

This story has been updated to include information from the creditors report.