When administrators were voluntarily appointed to Waratah Engineering Pty Limited at the end of July things were looking grim, it seemed like the almost 100-year-old business would fold.
However a century celebration is now a possibility due to the proactive approach by Rapsey Griffiths, the administrators charged with determining the future of the business.
Director Chad Rapsey said that as part of their urgent assessment of the Waratah Engineering’s financial position they focused on the immediate cashflow and working capital requirements of the business.
“We were able to improve cash flow to allow us to continue to trade the business,” Chad said. “The immediate benefit was that we were able to avoid closing the business and having to terminate all 31 employees. Under this scenario employees would be made redundant and unsecured creditors were unlikely to receive a return on the amount they were owed.”
By continuing to trade for the following month Rapsey Griffiths were able to negotiate the sale of the business and on 24 August 2016 they accepted the offer received by Jarvie Engineering part of the Swanson Industries Group to purchase the business known as ‘Waratah Engineering’.
“Jarvie Engineering has taken over and will continue with the business and employment of 24 staff moving forward. This is a great result for the local economy and investment in the area and mining services industry,” Chad continued.
“When we first took on the business it looked like all staff would lose their jobs. Whilst we would have liked to be able retain all the staff, employment for 80% of the staff is a much more positive outcome. In addition, there will be a return for unsecured creditors and many of the suppliers will benefit from the continuation of the business in the local region.”
Rapsey Griffiths is a boutique Insolvency & Advisory firm helping accounting and legal firms help their clients who are experiencing financial difficulties.
Rapsey Griffiths service Newcastle and the greater Hunter region, the Central Coast, Tamworth, Armidale, Lismore and other regional New South Wales locations.
Our team advises in all areas of corporate and personal insolvency administration, including liquidations, voluntary administrations, receiverships, bankruptcy, personal insolvency agreements and lender advisory. Our focus is on the-solve-in insolvency.