More than 3000 newsagents across Australia are unable to process bill payments or pre-paid mobile vouchers after the dramatic collapse of payments company Bill Express.
The company, which until last year was the major sponsor of the St Kilda Football Club, this afternoon told the sharemarket its operations would be placed into the hands of administrators, following a meeting with creditors this morning.
That announcement came after a company that had agreed to become a major investor in Bill Express, Al Othman Group, cancelled its plans for the debt-stricken company.
About 11am, Bill Express contacted newsagents urgently requesting they stop accepting all bill payment and recharge transactions, as well as deposits for the Bill Express-owned bopo pre-paid credit card.
"Bill Express advises that due to its current circumstances we request that you suspend vending all prepaid products, processing any bill payment transactions or taking any bopo card top-ups until further notice," the company said in the email to customers.
The Age last month reported that Bill Express had debts of more than $180 million.
In a statement to the stock exchange, Bill Express said it held a meeting this morning with advisers, financiers and major suppliers to discuss Al Othman Group's withdrawal.
"The suppliers indicated to the company that in these circumstances they are not willing to continue the standstill arrangements or otherwise support the company's continued trading," Bill Express director and chief financial officer Sean Slattery said.
"The directors have therefore resolves to appoint administrastors to the company, which will take effect today."
A central Melbourne newsagent owner, who did not want to be named, said up to a quarter of his monthly net sales involved Bill Express.
He said customers processed up to 300 transactions a week through the service, most often to recharge mobile phones and buy phone cards.
He did not know what the collapse would mean for "customers or previous customers".
"I'm not sure what the ramifications are ... the notification to newsagents didn't say anything except to stop selling," the owner said.
"I knew they were in trouble ... but I thought if I hang in there things will improve."
He said train commuters who often stopped in to recharge phones would have to find alternative services.
Matthew Harris , co-owner of The Source Newsagent in Queen Street, said he "hated" the company.
Mr Harris said the loss of the service would not significantly affect his sales but he was obliged to keep paying the company $550 a month for now redundant equipment until his contract ran out in about a year.
"They are an appalling company, they treated everyone with no respect," Mr Harris said.
He said Bill Express had set up two contracts with agents - an agreement on fees paid by newsagents to rent Bill Express equipment and a separate service agreement that covered commission payments to newsagents from Bill Express.
Mr Harris said the rental contracts were now being managed by a different company and newsagents were still obliged to pay fees despite no longer earning commissions from sales.
"You don't bite the people who are helping you," Mr Harris said.
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