The administrator of the collapsed Hastie Group engineering empire has dashed lingering hopes of substantial returns for creditors, signalling that few businesses will find new owners following the company’s collapse.
Speaking after a creditors’ meeting in Melbourne, Ian Carson of PPB Advisory said Hastie’s enormous debt bill included $100 million owed to “many thousands of creditors”, with rural and regional suppliers particularly hard hit. This amount is in addition to the half a billion dollars owed to banks that funded Hastie’s acquisition binge.
Many creditors had travelled from regional Australia for the “sombre” meeting, Mr Carson said. These included labour hire firms, and suppliers of plastic fittings and guns for fastening.
“They’re really normal, ordinary businesses…and a lot of them are locals. You know, Albury and Shepparton, regional areas,” Mr Carson told a media conference after the meeting.
Mr Carson said of the 44 businesses under its control, just five had been sold for a combined sum of less than $30 million, and another one or two might be sold for modest amounts.
Receivers and managers McGrathNicol, appointed by Hastie’s banks, have taken charge of Hastie’s better-performing assets, but Mr Carson was downbeat on the prospect of substantial returns from the sale of those companies.
“It’s hard to imagine there’ll be a material return even after McGrathNicol,” Mr Carson told BusinessDay.
Asked whether he had greater insight into the cause of Hastie’s collapse, Mr Carson said: “There have obviously been some failures. Whether it’s corporate governance or other things.”
He estimated that about 1,200 jobs had been saved across Hastie’s local workforce now under PPB’s remit, of the 2700 stood down at its collapse. This tally excludes the 1800-odd workers employed by companies taken over by McGrathNichol.
The stood-down workers are being urged to apply for the federal government’s GEERS program, which provides payments to people who are owed entitlements by their bankrupt or insolvent employer.
Mr Carson said it was difficult to determine exact numbers of job losses as some workers had simply taken on work with rival contractors.
Hastie had about 7,000 workers across the globe when it collapsed in late May, after the discovery of a long-standing accounting “irregularity” scared off a recapitalisation plan.
Its investors included Lazard Private Equity and Thorney Holdings, the Pratt family’s investment fund, which had supported an equity raising for the Sydney-based company last year.
Hastie’s chief executive Bill Wild said after the collapse that Hastie had a culture of “no bad news” and told staff members they had been let down by management. The collapse has also been blamed on overpriced acquisitions before the financial crisis that the company had failed to integrate.
On the prospect of legal action related to the collapse, Mr Carson said this course had not been his focus so far but he would be meeting with directors and shareholders in the months ahead.
Listed litigation funder IMF (Australia) and law firm Slater & Gordon have confirmed they are following developments closely.
There’s also been a 150-day extension period sought for the convening period before the second creditors meeting, Mr Carson said.
This story Administrator ready to work first appeared on Nanjing Night Net.