Administrators of national building supplier SWC Management, which collapsed last month, say they imminently expect a number of offers from key industry players to come through.
The Melbourne-based residential and commercial supplier went under after it ran out of money to meet $69 million in obligations, including unpaid wages, putting about 400 staff out of work.
Craig Shepard and Andrew Knight of KordaMentha, who were appointed as voluntary administrators, said a number of parties have already inspected the site, the plant and equipment operations.
“We think we’ll get a number of offers today, which we’ll need to work through,” Mr Knight, executive director at KordaMentha, said on Tuesday.
“We’re not sure what level they are at, but we do think we’ll get some offers.”
Mr Knight said they’ve also sold the G&H Cabinets business, which was 75 per cent owned by SWC.
“The transaction involved the sale of inventory, including raw materials and work in progress, and will hopefully save around 25 jobs out of 70,” he said.
“The business was sold to Ikon Cabinets, a company controlled by a director of G&H Cabinets. Ikon Cabinets will assume certain employee entitlements for any former employee rehired and take an assignment of certain equipment leases while we retain the debtors. They also get the first of refusal on the plant and equipment.”
Mr Knight and Mr Shepard also met the creditors for the first time on Tuesday at meetings in Sydney, Brisbane, Melbourne and Perth. The meetings were attended by a mix of creditors and employees, including 50 people in Melbourne, 15 in Sydney and 15 in Brisbane.
Expressions of interest
“We told the participants that we’re focused on seeking expressions of interest in relations to the group’s plant, equipment and inventory, to get someone to come in and restart the operations in the new year, and hopefully preserve some jobs,” Mr Knight said.
“We’re also working with key customers to secure essential project stock, so they can avoid delay in any of their projects.”
Mr Knight said they borrowed money through secured creditor ANZ to ensure weekly wages for about 350 staff were paid before Christmas.
SWC blamed the downturn in the building construction industry, slumping sales and tight competition for its demise.
Signs of trouble emerged a few months ago when the group’s financial report showed large losses and write-offs.
SWC reported a consolidated loss of $18.9 million after tax during the 2018-19 financial year. Of this, it has written off $4.54 million of inventory.
The company reported a $5.5 million cash loss from operating activities and spent $6.7 million on property and plant acquisition. To fund these, SWC raised $10 million from shareholders.
It had also embarked on a restructuring plan to reduce cost and raise revenue; this included staff cuts, procurement savings, and exit of non-profitable businesses.
SWC is operating under Baron Forge, PazStone, The Edge Glass, Stone-Tech and G&H Cabinets.
Established in 2004, SWC supplies and installs stone, tile, glass and other building products for some of Australia’s largest property developers, including Mirvac, Brookfield, Multiplex, Hacer, Porter Davis and Probuild.
It has also supplied Bunnings and Ikea and has worked at Array Apartments and 171 Collins Street in Melbourne, Arena Apartments in Brisbane, Westfield in Mount Gravatt, Brisbane, and on numerous contracts in Sydney.
Baron Forge was founded by Valentin, Norma and Claudio Paz in 1985.
SWC’s directors include Michael Triguboff, who was appointed in 2016, Greg Robertson, John Murphy and Salam Kheryakhos.
Leading property coverage delivered to your inbox
Sign up to our new weekly Inside Property newsletter