ASX-listed Viento Group collapses despite scoring $7.3 million contract for Gina Rinehart’s mine
Thursday, April 30, 2015/
An Australian Securities Exchange-listed mining services company has collapsed into administration just two weeks after winning a $7.3 million contract for Gina Rinehart’s mine, Hope Downs, with Rio Tinto.
Viento Group specialises in civil contracting and switchroom services and employs 250 people and turned over $60 million in the last half financial year.
But despite the lucrative contract, Hall Chadwick partners Richard Albarran, Brent Kijurina and Cameron Shaw were appointed as voluntary administrators last week of the Viento Group, HVLV, Mineworks, Viento Utility Services, Viento Contracting Services, Viento Forestry and Viento Equipment Hire.
The administrators are continuing to trade the Viento Group while working with the directors on a proposal for a formal restructure of the business via a deed of company arrangement.
“Early discussions indicate the difficult trading conditions in the mining industry coupled with poor results from a HVLV project have led the board to resolve to appoint voluntary administrators,” the administrators said in a statement.
The administrators said a restructure may also include the capital raising that was being undertaken prior to the appointment of the administrators.
Viento Group’s directors said they believe the restructure proposal will provide the best opportunity to preserve employment and maximise the return to creditors.
Businesses reliant on the mining sector have been struggling recently with the collapse of mining fleet services business Sargent earlier this year.
According to the latest Projectory Quarterly Survey of Business Expectations, which surveyed 82 mining suppliers, the mining sector is under increasing pressure.
Distributors were bleakest in their outlook, with 50% of respondents from distributor companies forecasting weaker conditions in the major projects economy in the December quarter and 67% forecasting weaker conditions in the next 12 months.