RCR Tomlinson Held Its First Meetings Of Creditors

  • Dec 04, 2018 AEDT
  • Team Kalkine
RCR Tomlinson Held Its First Meetings Of Creditors

On 14 November 2018, the securities of Diversified engineering and infrastructure company RCR Tomlinson (ASX: RCR) were suspended from the official quotation on ASX.  Later the voluntary suspension of the Company’s shares was extended by ASX on the request of RCR. After that, RCR Tomlinson Limited made an announcement on 22 November 2018 stating that it has appointed Jason Preston, Jamie Harris, Matthew Caddy and Rob Brauer of McGrathNicol as administrators to the company and this will be offering the company’s business for sale in order to attract the widest range of interest.

In the first meeting of RCR Tomlinson’s Creditors which was held on 3 December 2018, the company informed that the Administrators of the company are continuing to trade the businesses as usual (other than solar) and they are offering it for sale as a going concern in order to attract the widest range of interest. With regards to the sale of the business, the company has also put an advertisement in the Newspaper on 26 November 2018. Till now more than 200 parties have contacted the Administrators expressing their interest for the purchase of company’s business.

The administrators of the company will provide an update on the sale process by 24 December 2018, following a period of due diligence and receipt of offers. The company has informed that it is too early to form conclusive views on the potential return to unsecured creditors. In accordance with the Corporation Act, the company has put different classes of creditors in an order of priority. The Employees of the company are first in the priority list, followed by Secured creditors and then unsecured creditors. The shareholders of the company are last in the order.

Taking into the consideration the creditor profile of the business, the company will require strong offers to pay all its creditors. RCR Group is having around 2,800 employees and the company’s administrators are responsible for all wages and entitlements accrued post-appointment. The administrators will pay the wages and entitlements from funding which will be obtained from the sale and from trading surpluses. The pre-appointment entitlements of the company are currently estimated at approximately $32 million excluding redundancy provisions.

As a part of its going forward strategy, the company is planning to trade the viable components of the business while pursuing a sale of all or part of the business or its assets. The administrators of the company will investigate the reasons for the failure of the business and prepare a report to creditors providing creditors with the Administrators’ recommendation on the options available to vote at the second meetings of creditors.

As per the proforma FY 2018 results, the company reported a net loss of $29.9 million. At the end of FY 2018, the company was having total net assets of $408.6 million (proforma basis). Further, the net cash generated from operating activities was $47.5 million in FY 2018. RCR’s shares last traded at $0.870 on 9 November 2018.


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