An arrangement struck two years ago allowing Perth electrical, fire and security service provider Global Electrotech to slowly repay some of its $9 million plus debt to creditors has hit a snag.
An arrangement struck two years ago allowing Perth electrical, fire and security service provider Global Electrotech to slowly repay some of its $9 million-plus debt to creditors has hit a snag.
It has been revealed creditors of the business, which went into voluntary administration in June 2013 before its owners negotiated a successful deed of company arrangement later that year, are likely to receive between just 28 cents and 38 cents to the dollar, below the originally agreed amount.
The company’s more than 200 creditors were told two years ago that they were likely to receive 53 cents to the dollar and that final payment would be made by June 2015.
In a letter sent to creditors this week, WA Insolvency Solutions, which manages the creditors trust, has advised that Global Electrotech has requested a two-year extension to repay what it owes the creditors' trust which oversees the deed.
Since the deed was established, Global Electrotech has paid just over $720,000 of the $1.8 million it originally agreed to pay the trust.
With respect to the outstanding $1.1 million, the company has asked to pay it back in $100,000 and $250,000 instalments between February 2016 and December 2017.
According to the letter sent to creditors, Global Electrotech cited a downturn in the market generally, various legal actions it is involved in commenced by a number of creditors, and being awarded projects that were yet to commence as reasons for requesting the extension.
WA Insolvency Solutionshas recommended creditors accept the proposed variation to the creditors trust deed as this will provide a more certain return to them.
A vote on whether to accept the new terms will be held next Wednesday, December 16, in Perth.
However, phone calls to the business were answered by a staff member who referred to the company as Grama Bazita.
The name change appears to be related to a November 2013 news item on Indonesian company Grama Bazita International’s website where the diversified engineering business says it acquired a controlling stake in Global Electrotech at that time.
Mr Gardiner told Business News Global Electrotech was still owned by the original shareholders and Grama Bazita was a separate business, but he did not respond to further inquiries before time of publication.
Australian Securities and Investments Commission records show Mr Gardiner is a director of Grama Bazita Service & Maintenace Pty Ltd and Grama Bazita Electrical Contracting Pty Ltd. Another Global Electrotech director, Tony Martelli, is a director of Grama Bazita Electrical Contracting Pty Ltd. Both of the Grama Bazita entities are owned by Grama Bazita Australia Pty Ltd, a Singapore-controlled company which shares the same registered office address in South Perth as Global Electrotech.