It’s been a terrible week for corporate collapses, with ABC Learning and Allco going under, but the bad news shows no sign of ending.
Yesterday transport company Freightlink, owner of the $1.2 billion Adelaide-to-Darwin railway, was placed into voluntary administration with debts of around $500 million after the sale of the company fell through.
Directors have appointed insolvency firm PPB as administrator, while the company’s lenders – led by ANZ, the Royal Bank of Scotland and 14 other foreign banks – have called in KordaMentha as receivers.
KordaMentha partner Martin Madden will now try and get the sale process back on track and hope to have a deal done by late January or early February.
Services on the railway will continue to run as normal.
Meanwhile, the deadly combination of the credit crunch and the Federal Government’s bank deposit guarantee has claimed more small financial services companies.
Grenfell Securities, which operates two debenture funds with about $60 million, placed its funds into the hands of receivers last week because of rising defaults by borrowers and problems raising funds, caused to some extent by investors turning away from investment funds for the safety of bank deposits.
Boutique fund manager Ascend Capital has also announced it will cease trading and attempt a restructure as a result of the credit crisis and bank deposit guarantee.
“Clients are either sitting on their hands, going into cash or, having lost a lot of money in other listing companies, do not have much left to invest. The Government’s deposits scheme has encouraged a lot of people to keep their money in cash,” Ascend chairman Alan Beasley told The Australian Financial Review.
Related stories:
- More mortgage funds frozen as bank deposit chaos continues
- Rudd’s deposit guarantee could take finance sector back 40 years
