'Financial stress' for firm's former staff as $61m owed
PEOPLE and companies owed millions of dollars have been given two more months to figure out how to save a big beleaguered resources company from catastrophe.
Ostwald Bros owed about $61 million, Brisbane Supreme Court heard on Thursday.
A hearing was held after an administrator said some creditors "came to the fore" and wanted more time to arrange a meeting.
Justice James Douglas said Ostwald Bros was part of a resources and infrastructure group providing "large scale" services to the mining and construction sectors.
He said the company did work that included civil engineering and bulk haulage.
Company turnover in the past financial year was about $178 million but it had a loss of about $25 million, Justice Douglas said.
The company likely owed about $30 million to ANZ Bank and about $31 million more to some 536 other creditors.
But how best to get that money back was yet to be figured out.
Justice Douglas said creditors wanted Ostwald Bros to keep trading as a going concern, because that would provide the best return to people owed money.
Restructuring the company was also being considered.
"The administrators are in a situation where they either wish to sell the assets or obtain a viable deed of company arrangement proposal," the judge said.
Deed of company arrangements generally aim to get a better return for creditors than immediate winding up of a company.
Three former employees objected to the time extension.
"They are probably under financial stress and would like to see the affairs of the company resolved sooner rather than later."
But Justice Douglas said it was "significant" ANZ supported the application for a time extension.
Another company owed about $450,000 did not appear in court to debate the issue.
In fact, nobody appeared in court to oppose the application, the judge said.
The administrators, PwC, also needed until November 24 to give a report to creditors, the judge said.
The company's assets and "geographical spread" needed to be better understood.
"Vehicles may still be in the possession of some employees ... accounts need to be updated."
Justice Douglas said he was persuaded it was in the creditors' best interests to allow more time for the meeting.
In a statement after the hearing, PwC Australia administrator Derrick Vickers said several parties "came to the fore later in the process" and wanted more time for convening the second meeting of creditors.
"We require an extension to give interested parties time to complete sufficient due diligence to make an offer for the business," Mr Vickers said.
Earlier this month, a leaked recording of a creditors meeting in Toowoomba revealed the administrator said staff entitlements could rise if more workers were laid off.
The Toowoomba Chronicle earlier reported creditors included Caltex, Ergon Energy, FKG Group, IOR Petroleum and Wagners.
People owed money can access www.ostwaldbros.com.au/news/ for information.