Troubled civil construction and mining services business Brierty has been placed in voluntary administration after failing to secure what it considered to be an adequate pipeline of future work.
Troubled civil construction and mining services business Brierty has been placed in voluntary administration after failing to secure what it considered to be an adequate pipeline of future work.
Brierty, which has failed to recover from both the mining downturn and cost blowouts on a Main Roads project last year, said it had appointed Matthew Woods, Hayden White and Clint Joseph of KPMG as administrators today.
In February, Brierty told Business News it employed 380 staff in Western Australia, which was unchanged from last year.
In a statement today, Brierty said the board’s decision to enter administration was on the back of a number of factors that have affected cash generation and profitability.
That included difficulties in executing civil works profitably during the recent winter quarter, and an inability to secure an adequate new work order book in the near-term, due to what it said was uncertainty in the market as to the company’s financial position.
Last week, Brierty released its preliminary full-year results for FY17, which revealed a statutory net loss of $2.9 million – a near-halving of revenue to $126.4 million and an order book of $145 million.
“The company’s directors and management remain committed to working with the administrators to achieve the best possible outcome for all stakeholders,” Brierty said.
“The administrators will immediately undertake a financial and operational assessment of the company and intend to continue to operate the company’s business on a ‘business as usual’ basis until further notice.”
Brierty said its Northern Territory-focused development subsidiary Bellamack was excluded from the administration appointment and continued to trade, despite it also citing a sudden and sharp decline in land sales in Darwin as a further reason for the decision to enter administration.
In June, Brierty had signed a facility and debt restructure deal with Bankwest, which was conditional on the company’s rectification plan at Rio Tinto’s Western Turner Syncline project being approved by the iron ore miner.
The agreement increased Brierty’s borrowings with Bankwest from $35 million to $41 million, and was initiated after Rio issued Brierty with a notice of default and had the contractor’s operations suspended.
Brierty shares were worth 8 cents each before the company entered a trading halt this morning.
When the company began trading on the ASX in 2007, its shares were worth $1.44.
