21/02/2014 - 15:57

Forge down to 90 Aus staff

21/02/2014 - 15:57

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Forge down to 90 Aus staff

Forge Group administrators Ferrier Hodgson held the first creditors meeting in Perth today, where it was revealed there are now only 90 Australian staff still employed by Forge, down from 1,622.

While the meeting was held in private, Ferrier Hodgson released a statement saying preliminary investigations into the collapsed mining contractor would focus on what caused the company to fail and the likely date of insolvency.

It said investigations would also look into director-related transactions, any breaches of director duties and the acquisition of power project equipment supplier CTEC, which Forge previously blamed for several write-downs.

Speculation has placed Forge’s total debt at around $800 million, up from previous estimates of $500 million.

No announcement has been made about how much former financier ANZ Banking Group is owed, but estimates have placed the amount at $290 million.

Ferrier Hodgson said trade creditors are believed to be owed around $48.7 million, tax liabilities total $15.9 million and other provisions related to goods and services total $189.3 million, but Ferrier Hodgson said these figures were correct as at January 31 and subject to change.

Ferrier Hodgson said it was unable to form a view at this time as to whether there would be sufficient funds to pay all owing entitlements to Forge employees.

Ferrier Hodgson said it was working with receivers KordaMentha and Forge payroll and human resources staff to provide employees with separation letters and begin calculating employee entitlements, which are believed to total $15.5 million.

It said it had been in contact with key unions including the Construction, Forestry, Mining and Energy Union and the Communications Electrical Plumbing Union, as well as the federal government’s fair entitlements guarantee to assist with claims if Forge is placed into liquidation.

A second creditors meeting is scheduled for March 18.

Following this meeting a decision will be made about whether to pursue a deed of company arrangement so it can restructure its affairs and continue or the likely decision to liquidate.

Ferrier Hodgson also has the option to end administration should the company be found to be solvent, but this is highly unlikely.

A report to creditors with its initial investigation findings will be presented to creditors on March 7.

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