Creditors of Pindan and its contracting arm have accepted a $14.3 million deal from its parent company, despite more than 220 getting an average return of less than 0.56 per cent.
Creditors of collapsed construction company Pindan and its contracting arm have accepted a $14.3 million deal from its parent company, despite more than 220 getting an average return of less than 0.56 per cent.
Singaporean-based Oxley Holdings upped its DOCA proposal for the third and final time last week ahead of today’s two creditors’ meetings, which were postponed in the wake of its previous offer of $12.3 million.
The deal promised the full payment of all of the group’s 235 employees, a payment of $1.5 million to the liquidation entities, $1,500 for trade creditors and a dividend to larger creditors.
Earlier today, creditors of Pindan Contracting, which carried much of the company’s debt, voted to authorise administrators to execute the DOCA arrangement by Oxley Sparkle.
The decision was swayed by Oxley’s own vote, with the company owed $9 million.
This was despite administrators recommending against accepting the DOCA in favour of winding up the company, with the overwhelming majority of the 432 creditors in value likely to be "significantly worse off".
The decision would also have given administrators assent to pursue Oxley for damages in connection with letters claiming it would support the group to remain solvent until October 2021.
But administrator Sam Freeman of EY warned litigation could take years and create further uncertainty.
In contrast, administrators recommended creditors of Pindan Group accept and authorise them to execute Oxley Holdings’ deed of company arrangement, saying it was in the best interests of its 109 creditors - which were owed $69.8 million between them.
Almost one-third of those creditors were owed less than $1,500 and were due to receive a full payment, while 40 of the 109 were due to receive less than 0.009 per cent - owed more than $69.5 million between them.
During this afternoon’s meeting, 90 per cent of attendees voted in favour of accepting the DOCA, with just four creditors voting against the proposal.
The DOCA is now expected to be executed with Oxley within 15 business days.
Priority creditors, including employees, are expected to receive payment within the next three months.
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 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 was a registered creditor of Pindan in relation to a small advertising contract.
