26/11/2021 - 06:00

Mixed response to Oxley's $14.3m offer

26/11/2021 - 06:00

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UPDATED: Administrators have recommended Pindan Group's creditors accept Oxley’s $14.3 million payment offer, but that claimants from its contracting arm reject the move.

Mixed response to Oxley's $14.3m offer
In a report to Pindan's creditors, administrators recommended they authorise them to execute the DOCA. Photo: David Henry

Administrators have recommended creditors of Pindan Group accept its parent company’s $14.3 million payment offer, but that claimants from its contracting arm reject the move.

In an updated report released overnight, administrators from EY recommended Pindan Group creditors authorise them to execute the deed of company arrangement, which was lodged by Pindan’s Singaporean owner earlier this week.

Oxley Holdings upped its DOCA proposal for the third and final time ahead of the second creditors meeting on December 3, which was postponed in the wake of its previous offer of $12.3 million.

But administrators remain unconvinced that the DOCA remains the most beneficial option for creditors of the company's contracting arm, recommending they reject it in favour of having the company wound up.

According to administrators, the funds available for unsecured creditors of Pindan Contracting are materially less under the revised DOCA than they would be in both a ‘mid’ and ‘high’ liquidation scenario.

The decision would also give them assent to pursue Oxley for damages in connection with claims it would support the group to remain solvent until October 2021.

"While differential treatment of unsecured creditors is not uncommon in a DOCA, the extent of differentiation in rates of returns for creditors contemplated by the Revised Oxley DOCA may give rise to grounds for a subsequent challenge by an aggrieved creditors," the report stated.

The latest offer supports the payment of all 235 of the group’s employees, provides a payment to the liquidation entities of $1.5 million, a payment of $1,500 for trade creditors and a dividend to larger creditors.

Administrators said that while it was in the best interests of Pindan Group's 109 creditors to executive the revised DOCA, with 188 of the 432 creditors of Pindan Contracting set to receive an average return of less 0.56 per cent, the overwhelming majority of creditors in value would be "significantly worse off".

A decision on the future of the multi-disciplinary construction group is expected to be made at the meeting on December 3.

EY was appointed as administrators of three Pindan entities and liquidators of a further nine on May 18, after Business News revealed the company was facing financial trouble.

The multi-disciplinary construction group collapsed owing more than $97 million, leaving the business's 80 active projects, 280 staff and hundreds of subcontractors and trade suppliers in limbo.

Business News is a registered creditor of Pindan in relation to a small advertising contract.

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