Food delivery company Foodora Australia has entered voluntary administration just two weeks after announcing it will cease Australian operations on 20 August.

The company appointed Simon Cathro and Ivan Glavas of Worrells Solvency and Forensic Accountants as voluntary administrators on Friday, 17 August.

The move will effectively suspend the ongoing sham-contracting case against Foodora, which the administrator says will give the company “breathing space” to ensure a better return for creditors.

“While Foodora’s intention was to wind down its affairs in Australia in an orderly fashion and with the support of its parent company to meet all known liabilities, the company has been faced with significant external challenges,” the administrator said in a statement.

“These have impeded the company’s ability to implement a solvent wind down of its affairs.

“The voluntary administration process offers the company essential breathing space, including a statutory moratorium on claims against the company, with a view to ensuring that the affairs of foodora are administered in a way which results in a better return for creditors of foodora than would result from its immediate liquidation.”

The statement also said all payments due to Foodora’s creditors, including employees, riders and restaurants, have been met to the “best of its knowledge”.

Foodora has operated in Sydney, Melbourne and Brisbane since May 2015. Earlier this month, the company announced it will exit Australia to focus on other markets where it currently sees a higher potential for growth.

Creditors will be updated on the financial affairs of the company at the first meeting of creditors later this month.

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