A Sydney dining institution has been saved, with parts of the rescue plan including selling $1.15m worth of wine from its vault.
An iconic Sydney eating destination and late night hangout is set to relaunch after it was rescued from the brink of collapse.
Golden Century Seafood Restaurant on Sussex Street in the Chinatown district went into administration in August after serving Sydneysiders for 31 years.
The eatery, which was famed for its wall-to-wall crab and lobster tanks, went into voluntary administration after being unable to negotiate a new lease agreement.
The $4.5 million rescue plan, which was proposed by the family behind the restaurant, received overwhelming support from creditors.
It will be part funded by the bulk sale worth $1.15 million of wines from Golden Century’s vault to one buyer.
That’s slightly below the original $1.2 million proposed due to damaged or unfit bottles identified.
The plan will also allow the Wong family to clear its debts and pay most employee entitlements, including outstanding wages to 65 employees.
But employees will only get 47.4 cents in the dollar for redundancy entitlements.
Liquidator Desmond Teng from Chifley Advisory said it would be up to the owners whether they come back this year or next year, taking into account the impact of lockdowns and the pandemic.
“There are lot of puzzle pieces they need to put together and there is quite a lot to commit to at this time,” he told news.com.au.
“Rent is not cheap, employees are expensive and there is not much revenue at the moment, and with lockdown the city is dead.”
But he said the rescue plan was a good outcome, supported by employees who hope to come back when the restaurant is back up and running.
“It allows a reset and now the owners can have a bit more space to rethink and re-strategise when they would like to trade again, subject to the Covid-19 problem and subject to entering into a lease with good commercial terms, whether it’s in the same premises or different premises – they have time to think about that now,” he said.
The restaurant’s kitchen and equipment will be surrendered to ANZ bank.
Visited by celebrities such as Lady Gaga and Rihanna and frequented by politicians, the restaurant had made a profit of almost $825,000 for the end of the 2020/21 financial year, but suffered significant losses of $450,000 between July 1 and August 30 this year
Despite it’s popularity, accounts revealed the restaurant had been struggling with losses since 2018, suffering a $1.1m downturn in the 2018 financial year and another $590,000 hit in the 2019 financial year.
The restaurant was founded by Eric and Linda Wong, who moved to Australia from Hong Kong.