Australia's Mosaic Brands to analyse use of ‘safe harbour’ provisions

Australian fashion group Mosaic Brands has confirmed in a stock market filing that it is analysing the use of safe harbour provisions as it continues to tackle operational issues impacting financials.

The statement came in response to a report by The Australian Financial Review, which has initially stated that the company had already entered a safe harbour, a method often used by companies for protection during insolvent trading.

In the filing, Mosaic Brands, which owns Autograph, Noni B and W Lane, said: “These fiduciary obligations are matters the board has always taken seriously and we confirm that the advice provided has extended, from time to time, to considering the applicability of and compliance with the safe harbour provisions as outlined in the Corporations Act 2001 for the directors.

“The group confirms that during this time, Deloitte has been advising the company on refinancing considerations that have previously been announced to the market.”

Mosaic Brands further stated that it would continue to work with suppliers in order to deliver to customers, with anticipated recovery in its trading performance anticipated in the first half of FY25 “once these operational issues are resolved”.

The group will report its FY24 results on August 28, including an outlook for the first quarter of FY25.

Introduced in a 2017 amendment to Australia’s Corporations Act, the new ‘safe harbour’ legislation allows directors to access relief from personal liability and the option to continue trading under specific circumstances, as long as they are taking actions – such as a turnaround strategy – that could lead to a better outcome.