Synergy Plus Operations owes creditors more than $34 million
- 22 March, 2011 07:00
An investigation by the receivers of Synergy Plus Operations has revealed the company had been in significant financial trouble for sometime and owed creditors in excess of $34 million.
Synergy Plus Limited and its wholly owned subsidiaries – Synergy Plus Operations, Air Data, Air Data Australia and CPP Equity, went into voluntary administration and appointed Richard Albarran, David Ingram and David Ross of Hall Chadwick, as voluntary administrators on March 17.
GE Commercial appointed Quentin Olde, Andrew Schwarz and Michael Ryan of Taylor Woodings as receivers and managers to Synergy Plus Operations, the main operating subsidiary.
So far it has been revealed that company owes creditors more than $34 million and the figure set to rise. The secured creditor, GE, is owed $4 million, and other creditors including the Australian Tax Office (ATO), are owed more than $30 million.
Olde told ARN he didn’t know the exact figure on how much is owed to all secured and unsecured creditors, because the figure is changing day-to-day.
“We’re still trying to assess what’s going on and what the next step is,” Olde said. “We’re assessing whether or not the business can recommence trading, but at this stage, I don’t know.”
To date, investigations by the receivers have revealed the company had been in significant financial trouble for some time and had been in default of its loan covenants since October 31 last year, Olde said.
“We are currently in the process of assessing the viability of the company and its ability to fulfil existing orders or satisfy ongoing contracts,” Olde said. “We will endeavour to maintain communication with key stakeholders, including employees, throughout this process.
“On our appointment as receivers, we were advised that when the voluntary administrators were appointed, they stood down all staff of the Group until at least, March 22.”
At this stage, it is unclear whether or not staff will see any entitlements paid out or if they’ll have to make a submission via the Government's GEERS scheme, Olde said.
“There are substantial assets that are available to be recovered and stock, but it just depends on which party considers having a claim to those assets,” he said.
In July last year, Synergy acquiredAir Data and reportedly had more than 300 employees on its books. In December, it embarked on a restructuring strategy, which resulted in closing two branches and retrenching about 35 sales staff, including its national sales director, Joe Arcuri.
Synergy Plus Limited and the remaining subsidiaries, AirData and CCP Equity, remain in the hands of administrators.
As previously reported in ARN administrator, David Ross, said it is continuing to trade Air Data Australia.
“The view is to continue to trade, with a view of putting forward a re-capitalisation and a deed of company arrangement,” Ross said.
The first creditor’s meeting is scheduled for March 29.
It plans to propose a Deed of Company Arrangement to shareholders and creditors that incorporates the combination of Air Data’s business and the services business of Synergy Plus Operations, as the only operating focus.
Synergy Plus is continuing its discussions with Pacific Alliance Asia Opportunity Fund about its restructuring plan and an alternative funding facility.