An Australian travel start-up which helped people perform the difficult task of purchasing an international train ticket has gone out of business.
Metro 1 Travel and Technology Pty Ltd which ran little-known train booking platform ‘Rail Online’ has gone under with $2.7million in debt.
Administrators put the company into liquidation on New Year’s Eve while it still owed about $879,000 to employees who worked remotely at the defunct Sydney-based international rail booking company.
An estimated $603,304 is owed in wages, according to an administrator’s report.
Metro 1 Travel and Technology Pty Ltd director James Dunne had hoped a $12million capital raise would come through last month so the company could repay debt and fund ‘future growth’ but the dream went kaput.
The company facilitated travellers by helping them book international rail tickets for trains in the United Kingdom, Europe and Japan before it ran out of money.
The first nail in the coffin for Metro 1 Travel and Technology Pty Ltd was after it failed to repay train travel giant Eurail which last October issued a ‘statutory demand’ for money it was owed.
Eurail is an easy-to-use website which allows overseas travellers to book European train passes online with the click of a button.
Metro 1 Travel and Technology Pty Ltd which ran little known train booking platform ‘Rail Online’ has gone under with $2.7million in debt
Rail Online helped travellers purchase international train tickets
This warning page is what remains of Rail Online
Aussie travellers can easily use Eurail and other popular services including BritRail, which offers train passes for the UK.
It’s also relatively easy to obtain a Japan Rail Pass by purchasing one online via the official website.
The pass for non-Japanese residents offers enormous ease jumping on and off Shinkansen bullet trains.
It’s unclear why anyone would use an online third-party to book train travel, however, according to a statement on the last remaining page of the Rail Online website, rail tickets that have already been purchased and issued remain ‘valid for travel’.
A document filed with ASIC last week showed the company owed about $2.7million in estimated debts, including about $1.8million owed to unsecured creditors.
It’s been reported, some senior staff previously agreed to the company accruing a portion of their salary and wages to help with its capital requirements’.
These staff agreed to the deal with the ‘understanding they would be paid their accrued wages once the company had enough liquidity’.
The administrators were investigating the accrued amounts further, according to the report filed to ASIC last week.
Rail Online sold tickets for trains in Japan. A Shinkansen bullet train zooms past Mount Fuji (above).
Travellers can easily use Eurail and other popular services including BritRail, which offers train passes for the UK
Metro 1 Travel and Technology Pty Ltd failed to repay train travel giant Eurail which last October issued a ‘statutory demand’ for money it was owed
Prior to the company’s liquidation, senior Metro 1 Travel and Technology staff terminated the employment of one employee and stood down three others before they were also made redundant last month.
The report states Metro 1 Travel and Technology had been ‘unable to repay legacy debts to major creditors’ and it ‘could not scale the business’.
‘As the company was not able to achieve revenue growth, it did not have the financial means to support its cost base, which was already relatively lean,’ the administrators wrote.
‘This resulted in the company accruing significant legacy debts in which it was ultimately unable to repay as and when they fell due.’
Mr Dunne told administrators the intended $12million capital raise was unsuccessful due to ‘external factors’.
The administrators are looking for potential buyers of the Rail Online business and reported they were in discussions with interested parties.
Creditors were expected to receive an estimated total of up to $366,382 if the Rail Online sale was successful.
The administrators are also investigating a potential tax refund between $120,000 to $200,000 for ‘costs incurred developing the intellectual property for the Rail Online platform’, the report states.
The Japan Rail Pass offers enormous ease jumping on-and-off Shinkansen bullet trains (above)
Metro 1 Travel and Technology Pty Ltd is also waiting on $73,000 from debtors which, if collected, could boost the payout for creditors.
The administrators also found $120,288.99 left in the company’s bank and PayPal accounts but a further $134,000 in bank guarantees provided to rail operators would be tricky to recover as the company owes major debt to these rail companies.
Mr Dunne was contacted for comment.
