Subcontractors and suppliers will not be paid any of the $170 million they are owed as a result of a major engineering firm collapse, the firm’s administrators say.
Released yesterday, a report to creditors by administrators McGrathNicol said that whilst payments could be expected for secured creditors and employees of RCR Tomlinson, unsecured creditors would see none of the $170 million they are owed.
Founded in 1898, RCR had grown to become a diversified engineering, procurement and construction company operating across sectors such as power, renewable energy, water, rail, roads, mining services, HVAC, facilities management and electrical services.
Despite raising $100 million from shareholders in August, the company went into administration in November owing $435 million amid cost blowouts associated with a solar energy project in Queensland.
The report advised creditors that there was no prospect of continued operation and that the company should be liquidated.
It said completed sales of the company’s businesses had raised $51 million whilst a further deal to sell power, resource and water units is expected to settle on Friday.
The report also noted that the company could have been trading insolvent for at least one month.
It said the October month-end accounts had demonstrated that the creditor aging profile had increased and that debts were not being paid when due.
Of the $435 million owed, up to $232 million is owed to secured creditors including the Commonwealth Bank, $33 million is owed to former employees and $170 million is owed to unsecured creditors.
Of these amounts, secured creditors are expected to receive between $72 million and $157 million and former staff were likely to get between $16 million and $18 million.
Unsecured creditors including suppliers and subcontractors would not receive any of the amounts they are owed.