AFTER three years of battling financial headwinds and the coal industry downturn, mining services company SubZero has been placed in the hands of insolvency experts.
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In statements to the Australian Stock Exchange, the SubZero group announced that Ferrier Hodgson had been appointed receivers and managers to the parent company, SubZero Group Limited, and 10 of its subsidiaries.
Ernst and Young had been appointed as voluntary administrators to the same 11 companies.
In an update to the market on Friday, SubZero said the company’s financiers were happy with a recent financial turnaround but a planned recapitalisation plan had not been completed.
This meant the main financier – which was not named – had decided to put the group into voluntary administration and receivership “to allow for a more effective way to capitalise the balance sheet”.
Ferrier Hodgson partner Ryan Eagle said Ferrier’s intended to trade the business as usual as it sought a financial resolution.
He said SubZero employed about 450 people and had an annual turnover of about $60 million from contracts in about 25 mines.
“We are immediately calling for expressions of interest for a recapitalisation or purchase of the business as a going concern,” Mr Eagle said.
“We will be working with SubZero’s customer base to ensure the uninterrupted continuation of services.”
Mr Eagle said customers and supplier should continue dealing with the company’s Muswellbrook offices.
SubZero was founded in Muswellbrook in 1999 by Scott Farrell, and grew over the years with various acquisitions and the creation of a labour-hire arm in 2011.
In 2013 it listed on the stock exchange and opened a purpose-built 10,000-square metre mining equipment repair and refurbishment facility at Muswellbrook.
It expanded into Moranbah in Queensland and added an outlet in Perth.
Soon after listing, SubZero told the market it expected 2014-15 profits of $24 million to $28 million on earnings of between $150 million to $175 million.
Instead, its accounts showed a loss of $6 million on turnover of $84 million in 2013, followed by a loss of $12.9 million on earnings of $64 million and a loss of $29.5 million on revenues of $56 million in 2015.
Mr Farrell stood down in late 2014 to be replaced by mining engineer Joe Clayton, whose previous jobs included running the Watermark project near Gunnedah for China Shenhua.
SubZero’s shares debuted on the stock exchange at more than 60 cents but were down to 15 cents a year later and have traded recently at 0.5 cents each.
