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Vietnamese tuckshop business MissChu found to owe $4 million to creditors

Lisa Visentin
Lisa Visentin

Trying to get her business back: Nahji Chu says she takes full responsibility for the company's mismanagement.
Trying to get her business back: Nahji Chu says she takes full responsibility for the company's mismanagement.Michele Mossop

Vietnamese refugee-turned-entrepreneur Nahji Chu has renewed her pledge to save her rice-paper roll empire from more than $4 million debt, after creditors were informed of the scale of the wreckage last week.

Chu, who was forced to place her eponymously named Vietnamese tuckshop business into voluntary administration in December, told Fairfax Media she was pressing ahead with plans to buy back the business and had a group of advisers on board as equity partners.

"It's my absolute strategy to win back that business and I'm pretty confident that I will.

"It's the only thing on my mind."

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Up to $400,000 is owed to secured creditors, and debts to unsecured creditors amount to $2.5 million.

A further $1.4 million is owed to employees, most of it redundancy payments and entitlements.

Chu conceded she had taken her "eye off the ball" as the business's costs blew out as staff numbers exploded.

She said that in October, she discovered the business was running at 58 per cent labour, which amounted to $1.6 million increase in payroll expenses. About 40 staff were immediately retrenched when the business went into administration.

Describing her staff as "my family", she said she couldn't sleep at night knowing that she owed people money.

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"I've lost my business. I can't imagine a worse punishment than that."

The 44-year-old has until the end of January to finalise her bid, after administrator KordaMentha Restructuring informed creditors that the sale process would commence next week in a bid to pay off the company's debt.

"It's always best to try and sell businesses as going concerns so they're going to stay open at least until the end of the sale process," KordaMentha spokesman Michael Smith said.

He confirmed 28 expressions of interest had already been received, and that administrators were confident the business would sell.

"[MissChu] is obviously a well-known brand and good brand. They are actually operating quite [well] but costs were allowed to get out of control."

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Smith said KordaMentha would consider any offers made by Chu, and would advise creditors at the next formal meeting, scheduled for February 9, whether to accept or proceed with the sale.

Administrators were not necessarily beholden to the highest offer, but would opt for the "best offer that is capable of being accepted" taking into account any conditions attached to the offers.

Chu said she was "determined stay on" in the business even if her bid were rejected.

"I'll make sure whoever buys in maintains my standards and all the branding that goes with it."

She said if the worst case eventuated and she were sidelined from the business entirely, she still had a card to play.

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"There's nothing to stop me from opening a business called MrsChu – she's older and wiser and this time she means it."

"As far as I'm concerned it's only chapter one."

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Lisa VisentinLisa Visentin is the federal political correspondent for The Sun-Herald and The Sunday Age.

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