Administrators say a liquidation is “not inevitable” after being appointed to the Western Australian construction company S&N Civil Constructions.
S&N operated a number of civil and mining construction projects Australia-wide including the Groote Eylandt Expansion Project and Argyle Diamond Mine.
The company has 300 employees with contracts in progress and established operations in Western Australia, Queensland and the Northern Territory.
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Its clients include BHP Billiton, WA Water Corporation, Leighton, Origin Energy, Rio Tinto and Tanami Gold.
Martin Jones and Darren Weaver from Ferrier Hodgson were appointed as administrators on April 11 and called for expressions of interest yesterday.
A notice placed in national newspapers sought expressions of interest from “parties interested in participating in a financial restructuring of S&N, a major civil construction and concreting company with operations nationally”.
“Opportunity exists for parties to take either a debt or equity position in the company, or to purchase the business as a whole,” the notice said.
A first meeting of creditors will be held on April 23, 2012 at the Holiday Inn in Perth, but in the meantime all ongoing operations at S&N are continuing.
Martin Jones, partner at Ferrier Hodgson, told SmartCompany he did not see the process as a liquidation, rather “an approach to find a positive solution”.
“It does not have any of those key signals that lead me to conclude that [liquidation] is inevitable, but we are working through all the details with a view to finding a path out of the administration,” says Jones.
“S&N has enjoyed growth and expansion over the last couple of years but got into difficulty with a contract and as a consequence of that and other financial pressure has made a decision to appoint administrators.”
Jones would not reveal what the contract in question was.
Jones says it is “counter-intuitive” that S&N has experienced difficulties in the middle of a mining boom.
“But what often happens with companies that expand quickly is that it puts pressure on their information systems, ability to find funding and their management systems.”