The administrators of embattled construction company Pindan have been granted another extension, while flagging a potential claim against the company’s directors for insolvent trading.
The administrators of embattled construction company Pindan have been granted a month-long extension before the next creditors meeting, while flagging a potential claim against the company’s directors and parent company Oxley Holdings for insolvent trading.
In a statement released to creditors of the company late this afternoon and obtained by Business News, administrators Sam Freeman, Vincent Smith and Colby O’Brien of EY confirmed the Supreme Court had allowed a second extension of the convening period from September 16 to October 28, 2021.
According to the statement, the extension was sought to allow for the consideration of a proposed refinance of debt facilities with BankWest.
They said the extension would also allow them to obtain further information in relation to proposals for a deed of company arrangement for Pindan Contracting and Pindan Group and to continue pursuing investigations into the group's affairs.
Meanwhile, administrators said investigations had indicated that Pindan Group was suffering from increasing financial distress from January 2021, incurring losses, struggling to meet payments, incurring significant debts to the Australian Tax Office and seeking an urgent buy out to stay afloat.
Based on those investigations, EY has revealed it believes the group was insolvent from March 2021.
Given its preliminary conclusion on insolvent trading, administrators have confirmed a potential claim against Pindan Group's directors for insolvent trading may proceed.
They indicated that Singaporean parent company Oxley Holdings could also face a potential claim in connection with letters of support it wrote to the group last year confirming it would support all Pindan companies to remain solvent until at least October 2021, as revealed by Business News in May.
At this stage, administrators believe the second creditors meeting is likely to be held in late October or early November.
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 collapse left the 44-year-old multi-disciplinary construction business's 80 active projects, 280 staff and hundreds of subcontractors and trade suppliers in limbo, with initial estimates indicating the losses could reach more than $80 million.
The administrators had already secured an extension of the convening period until September to facilitate the sale of the company’s asset management arm, which was sold to Programmed.
Business News is a registered creditor of Pindan in relation to a small advertising contract.
