Fears are held for the jobs of 2,700 Australian workers stood down from troubled engineering firm Hastie Group, but the administrator hopes most will return to work.
The 44 Australian entities of the loss-making company were placed in administration on Monday as Hastie collapsed owing about $500 million.
Administrator Ian Carson, of PPB Advisory, said Hastie had been hurt by difficult economic conditions, and the discovery last week of $20 million in irregularities in the group’s accounts had been “the straw that broke the camel’s back”.
Hastie appointed administrators after talks with banks and new investors to extend its loans broke down when the company discovered an employee had been falsifying accounts.
Mr Carson said most of the Hastie employees who had been stood down were working on contracted projects that still needed to be finished.
It was, therefore, possible that head contractors on the projects may be able to use the Hastie Group employees.
“So we’re hopeful that the majority will get back to work,” Mr Carson told reporters.
However, he added: “If it becomes clear there’s no work then we will terminate them.”
“But in the meantime we’d rather get them back into work than terminate them.”
The Australian Manufacturing Workers’ Union (AMWU) said Hastie workers in NSW, Queensland, Victoria and the ACT faced an uncertain future.
“This is a big company whose mismanagement and management malpractice has led to real uncertainty and a terrible position for many people and their families,” AMWU NSW branch secretary Tim Ayres said.
Hastie is a major supplier of airconditioning and refrigeration systems for the building and resources sectors.
It holds contracts for major projects including the new Royal Adelaide Hospital, the University Hospital on the Gold Coast and the desalination plant in Victoria.
The company employs about 4,000 people in Australia and has operations in New Zealand, the United Kingdom, Ireland and the Middle East.
PPB Advisory is taking control of Hastie’s mechanical, electrical and plumbing businesses in Australia, which employ 2,700 workers but don’t have enough money to continue operating.
McGrathNicol has been appointed receivers and managers of 11 companies that include the refrigeration and maintenance services divisions in Australia.
Those businesses will continue to trade while being prepared for sale.
Mr Carson said a number of potential buyers had already expressed interest in some businesses within the Hastie Group.
He said Hastie was “significantly insolvent” and had tried to recapitalise but was unsuccessful.
A substantial number of lenders, including “virtually every bank in Australia”, were unlikely to get their money back.
Mr Carson said the difficult economic climate and the fact the group was a complex mass of many companies had weighed upon Hastie.
The discovery last week of $20 million in accounting irregularities had pushed Hastie over the edge but was not the main cause of its demise.
“The company had been struggling for some time,” Mr Carson said.
A forensic accounting team was investigating the accounting irregularities, and a report would be handed to the Australian Securities and Investments Commission.