23/09/2016 - 05:39

Hughes Drilling enters administration

23/09/2016 - 05:39

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The parent company of Perth-based mining services company JSW Australia has entered voluntary administration, with representatives of McGrathNicol appointed yesterday.

The parent company of JSW Australia has gone into voluntary administration.

The parent company of Perth-based mining services company JSW Australia has entered voluntary administration, with representatives of McGrathNicol appointed yesterday.

Jason Preston, Shaun Fraser and Jamie Harris were appointed as administrators of Brisbane-based Hughes Drilling, with the intention of keeping the business in operation while they undertake a financial and operational assessment of the firm.

“The objective of the administrators is to work closely with management, employees, suppliers and customers to quickly stabilise operations and to determine the appropriate strategy for the business,” McGrathNicol said.

“A sale and recapitalisation campaign will be commenced immediately.

“Based on initial discussions with management, the administrators are optimistic that recapitalisation proposals will emerge.”

Hughes, which hasn’t actively traded on the ASX since late June, purchased JSW for $24.4 million in 2013.

The local subsidiary was recently awarded a two-year contract extension for work at Ramelius Resources’ Mt Magnet gold operations, where it has been working since 2011, and a new contract for work at South32’s Boddington bauxite mine.

It was also recognised at the WA Training Initiative awards last year for outstanding achievements in training, taking home second place.

In July, Hughes advised the market that JSW had been awarded new water well drilling contracts for the Water Corporation for the drilling of new production water bores at Laverton in the North Eastern Goldfields and also at Capel in the South West. These new water bores are being completed to increase domestic water supply and will utilise two of JSW’s specialist water well drill rigs.

The company said it had completed a number of contracts for the Water Corporation and had also been awarded a water well drilling contract for Main Roads Western Australia. That contract involved drilling production water bores at various locations in the Pilbara for road maintenance and construction purposes.

Also in July, Hughes told the market of the resignation from its board of John Silverthorne, best known as a founder of NRW Holdings. Mr Silverthorne had been a director since 2013.

Hughes employs a workforce of 140 employees across its facilities in Kalgoorlie, Boddington, Port Hedland and Perth.

In the six months to December, JSW contributed $18.4 million in revenue to its parent company; although that was down 31 per cent on the previous corresponding period.

The revenue fall was attributed to a reduced volume of work available with iron ore miners, coupled with a deferral of a number of projects by the state government.

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