Little hope for creditors as Hastie debts top $600m

Ian Carson, Head of Partners for PPB Advisory.THE administrator of Hastie Group has dashed lingering hopes of substantial returns for creditors, signalling that few businesses of the once-sprawling engineering services company will find new owners.
Nanjing Night Net

Speaking after a creditors’ meeting in Melbourne, Ian Carson, of PPB Advisory, said Hastie’s debt bill included $100 million owed to ”many thousands of creditors”. This is in addition to more than $500 million owed to banks that funded Hastie’s acquisition binge.

Many creditors had travelled from regional areas to hear it was unlikely they would receive ”any extensive” return, given the amount owed to the banks. Mr Carson said some of them were owed ”serious amounts” of up to $500,000.

”They’re really normal, ordinary businesses … and a lot of them are locals – you know, Albury and Shepparton, regional areas,” he said after the meeting. He described the mood of the meeting as ”sombre”.

Mr Carson said that of the 44 businesses under its control, only five had been sold for a combined sum of less than $30 million, and another one or two might be sold for modest amounts.

Receiver and manager McGrathNicol, appointed by Hastie’s banks, has 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 being a material return even after McGrathNicol,” he said.

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 about 1200 jobs had been saved of the 2700 stood down at its collapse. The tally excludes about 1800 workers employed by companies taken over by McGrathNicol.

A spokeswoman for McGrathNicol said yesterday there was no update on its sale process for Spectrum Fire and Safety, Hastie Services, industrial refrigeration systems company Gordon Brothers Industries or Austral Refrigeration. Austral was already for sale when Hastie collapsed.

Earl Setches, secretary of the Plumbing Trades Employees Union, said most of its members had held on to work and their entitlements in Victoria. He said that of the 600-odd Hastie workers in the state, only a handful were now out of work. ”It rocked people’s lives for a week or two, but we’ve had a good outcome,” he said.

Hastie had about 7000 workers around the world when it collapsed late last month, after the discovery of a long-standing accounting ”irregularity” scared off a recapitalisation plan.

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 and badly integrated acquisitions.

On the prospect of legal action, Mr Carson said this had not been his focus so far but he would be meeting directors and shareholders in the months ahead. Listed litigation funder IMF (Australia) and law firm Slater & Gordon confirmed they were monitoring the collapse.

This story Administrator ready to work first appeared on Nanjing Night Net.

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