No liquidity crisis at Arrium: directors

Original article by Max Mason
The Australian Financial Review – Page: 22 : 5-Mar-21

Marcus Pesman has told the New South Wales Supreme Court that collapsed steelmaker Arrium was not in a liquidity crisis. He is representing eight former members of the Arrium board in a lawsuit brought by liquidator KordaMentha for alleged insolvent trading. Pesman is also representing former Arrium CFO Robert Bakewell in the same action, along with two other actions brought by lenders to which the eight former board members are not defendants. Pesman told the court that the lenders had sufficient information available to make their own assessment of Arrium’s financial state at the time, while he noted that the Arrium board met 21 times between December 2015 and April 2016, indicating that the directors took their responsibilities seriously.

CORPORATES
ARRIUM LIMITED, KORDA MENTHA AND COLLEAGUES PTY LTD, SUPREME COURT OF NEW SOUTH WALES

ASIC on watch for phoenix revivals

Original article by David Ross
The Australian – Page: 18 : 18-Jan-21

The Australian Securities & Investments Commission will crack down on phoenix activity in the corporate sector as the federal government winds back insolvency protections that were introduced in response to COVID-19. ASIC commissioner Diana Steicke says the corporate regulator has no evidence to suggest that this will lead to an increase in phoenixing; however, she says ASIC will keep a watch on high-risk company directors and pre-insolvency advisers who could potentially engage in such activity.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Rise in failures a pointer to future

Original article by Patrick Commins
The Australian – Page: 17 : 15-Jan-21

Michael Fung of PwC and Sal Algeri from Deloitte expect the rate of business failures in Australia to be higher than usual in 2021. The federal government has wound back some of the COVID-19 support measures that helped businesses to stay afloat during the virus-induced economic downturn, while the JobKeeper scheme is slated to be phased out in March. Data from the Australian Securities & Investments Commission supports the view that a rise in insolvencies is likely; an average of 60 companies were placed in external administration in the final two weeks of 2020, compared with 13 during the same period in 2019.

CORPORATES
PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, DELOITTE TOUCHE TOHMATSU LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Grocon on brink of administration

Original article by Ben Wilmot
The Australian – Page: 13 & 14 : 23-Nov-20

Troubled construction company Grocon was said to be in talks over the weekend of 21-22 November about the appointment of administrators, although no move has yet been made. Grocon has been involved in a number of disputes in recent times, including with Infrastructure New South Wales, against which Grocon has launched a $270 million legal action. Grocon head Daniel Grollo recently said that its creditors would be "first in line" to be paid if it wins its action against Infrastructure NSW. Grocon’s latest problems relate to a project in Melbourne, where it is said that sub-contractors are owed around $8 million. Grocon is building a tower for Impact Investment under a fixed-price contract, and claims that it has not been paid by Impact since May.

CORPORATES
GROCON PTY LTD, INFRASTRUCTURE NEW SOUTH WALES, IMPACT INVESTMENT GROUP PTY LTD

Bondholders move to stop sale of Virgin

Original article by Lucas Baird
The Australian Financial Review – Page: 13 & 22 : 7-Jul-20

Deloitte will oppose an application for the Takeovers Panel to halt the sale of Virgin Australia to private equity firm Bain Capital. Virgin’s bondholders want its creditors to be given an opportunity to vote on their proposal to recapitalise the failed airline; this includes a debt-for-equity swap and relisting Virgin on the sharemarket. A spokesman for Deloitte says the administrators believe that the application to the Takeovers Panel is without merit and the sale to Bain is the best outcome for all creditors.

CORPORATES
VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, DELOITTE TOUCHE TOHMATSU LIMITED, BAIN CAPITAL LLC

Shareholders likely to miss out altogether from Virgin sale

Original article by Lucas Baird
The Australian Financial Review – Page: 13 & 16 : 1-Jul-20

Virgin Australia’s joint administrator Richard Hughes has advised that the failed airline’s creditors are unlikely to be repaid in full. He has also warned that Virgin’s shareholders are highly unlikely to receive any payout from its US-based private equity firm Bain Capital. Sources close to several of Virgin’s five major foreign shareholders have indicated that this outcome had been expected. Bain Capital will formally take control of Virgin on 1 July.

CORPORATES
VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, DELOITTE TOUCHE TOHMATSU LIMITED, BAIN CAPITAL LLC

Bond holder bid shakes Virgin

Original article by Robyn Ironside, Damon Kitney
The Australian – Page: 13 & 17 : 25-Jun-20

Virgin Australia’s administrator Vaughan Strawbridge has been presented with a debt-for-equity proposal from about 5,500 of the failed airline’s bond holders. They would receive shares in Virgin and provide an $800m capital injection for the airline, which would remain a listed company if their proposal is accepted. The bond holders would have the option of immediately selling their shares and receiving about $0.70 for every dollar that they are owed. Bond holders contend that it is best outcome for Virgin and its employees. Strawbridge is slated to select the preferred private equity bidder within days.

CORPORATES
VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, DELOITTE TOUCHE TOHMATSU LIMITED

Bidders spell out Virgin job cuts to unions

Original article by Jemima Whyte,Lucas Baird
The Australian Financial Review – Page: 13 & 16 : 4-Jun-20

Bain Capital and Cyrus Capital Partners must submit binding offers for Virgin Australia by 22 June. The two final bidders for the failed airline are under growing pressure to outline their plans for Virgin, including the likely job losses. Unions held talks with Bain and Cyrus on 3 June, and some sources have suggested that more than 20 per cent of Virgin’s employees could be retrenched. BGH Capital is said to have been looking at cutting 2,000 jobs if it had acquired Virgin.

CORPORATES
VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH,BAIN CAPITAL LLC,CYRUS CAPITAL PARTNERS LP,DELOITTE TOUCHE TOHMATSU LIMITED,BGH CAPITAL PTY LTD

Bain, Cyrus to battle for Virgin

Original article by Glenda Korporaal, Damon Kitney, John Durie
The Australian – Page: 13 & 16 : 3-Jun-20

Vaughan Strawbridge of Deloitte says the unsuccessful bidders for Virgin Australia could potentially team up with Bain Capital or Cyrus Capital Partners in buying the failed carrier. Bain and Cyrus must submit binding bids for Virgin by 12 June, after the final short-listed was culled from four to just two. A consortium led by BGH Capital and AustralianSuper had been regarded as a prime contender to buy Virgin, but sources have indicated that neither party is likely to seek to return to the bidding process.

CORPORATES
VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, BAIN CAPITAL LLC, CYRUS CAPITAL PARTNERS LP, DELOITTE TOUCHE TOHMATSU LIMITED, BGH CAPITAL PTY LTD, AUSTRALIANSUPER PTY LTD

ANZ urges stricken firms: wind up now

Original article by James Frost
The Australian Financial Review – Page: 13 & 17 : 1-Jun-20

The ANZ’s head of retail and business banking, Mark Hand, suggests that 2021 will be a very difficult year for small businesses. He suggests that many small and medium enterprises will not recover from the COVID-19 crisis, even with loan deferrals from banks and wage subsidies from the federal government. He says the best move for some SME owners would be to wind up their business and walk away with some equity. The ANZ is worried that the recent spark of optimism resulting from a fall in new COVID-19 cases and the easing of some restrictions will result in some of its business borrowers becoming complacent.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ