BUSINESS FAILURES – AUSTRALIA

Almost 3000 builders collapse in a year

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 29 : 3-Jul-24

Data from the Australian Securities & Investments Commission shows that a total of 10,497 companies were declared insolvent in the 2023-24 financial year up to l6 June. This includes 2,832 insolvencies in the construction industry, which is 28 per cent higher than the previous financial year. The data also shows that rate of corporate collapses in the building industry is accelerating, with 120 insolvency appointments during the first two weeks of June; this compares with 314 in May and 255 in April. Master Builders Australia CEO Denita Wawn says factors such as labour shortages, material cost inflation, inefficient regulation and "draconian" industrial relations reforms have made construction projects unsustainable.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, MASTER BUILDERS AUSTRALIA INCORPORATED

Workers sacked after no offers made for Bonza

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Original article by Robyn Ironside
The Australian – Page: 17 : 12-Jun-24

Bonza’s administrator Hall Chadwick has advised that the failed airline’s entire workforce of 323 has been retrenched, while all future flights have been cancelled in order to give customers "certainty". Hall Chadwick partner Kathleen Vouris has revealed that the firm had received no offers for Bonza by the deadline of 7 June, although she said that a deal to sell the airline remains a possibility. Vouris also indicated that Bonza employees will not be able to access the federal government’s fair entitlements guarantee scheme until Hall Chadwick decides whether to liquidate the airline.

CORPORATES
BONZA AVIATION PTY LTD, HALL CHADWICK AUSTRALIA PTY LTD

NSW top state for business failures

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Original article by Matt Bell
The Australian – Page: 15 : 29-May-24

Data from the Australian Securities & Investments Commission shows that 8,742 businesses nationwide were declared insolvent in the first 10 months of 2023-24. This compares with just 6,200 insolvencies during the same period in the previous financial year. NSW has recorded the biggest growth in insolvencies, with 3,695 businesses collapsing in the 10 months to 30 April; there have been 2,247 insolvencies in Victoria and 1,608 in Queensland. Sectors such as construction, accommodation, retail and food services have recorded the biggest growth in insolvencies.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Grounded: Bonza set to join long list of failed Australian airlines

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Original article by Elias Visontay
The Guardian Australia – Page: Online : 1-May-24

Hall Chadwick has been appointed as the voluntary administrator of budget airline Bonza, which has carried more than 750,000 passengers since it commenced operations in January 2023. Bonza’s fleet of Boeing 737 Max-8 aircraft was grounded on Monday after aircraft lessor AIP Capital moved to repossess them. While Bonza’s future is uncertain in a sector that is dominated by Qantas and Virgin Australia, it may join other failed airlines such as Ansett, Compass, Impulse and OzJet.

CORPORATES
BONZA, HALL CHADWICK AUSTRALIA PTY LTD

Retail insolvencies rise as cost-of-living pressures slash consumer spending

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Original article by Kate Ainsworth, Emilia Terzon
abc.net.au – Page: Online : 10-Apr-24

Data from the Australian Securities & Investments Commission shows that 502 businesses in the retail sector have gone into administration so far in 2023-24, compared with just 193 during the same period in 2021-22. Factors such as the cost-of-living crisis and high mortgage interest rates are weighing on consumer spending, with smaller retailers in particular bearing the brunt. National Retail Association CEO Rob Godwin expects more businesses in the sector to collapse in the final months of the financial year. He says the federal government’s budget in May should provide financial assistance for retailers, particularly small and medium-sized businesses.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL RETAIL ASSOCIATION LIMITED

Nickel miners brace for job losses after Panoramic ends production

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Original article by Brad Thompson
The Australian Financial Review – Page: 15 : 10-Jan-24

About 300 workers at Panoramic Resources’ Savannah nickel mine in Western Australia are expected to lose their jobs after the company’s administrators moved to suspend production at the site. FTI Consulting was appointed to the role in mid-December, with the aim of keeping Savannah open, but the price of nickel has continued to fall. Panoramic reopened the Savannah mine in the Kimberley region in 2021, but factors such as a sharp fall in the nickel price in 2023 weighed on the company. There are fears of further job losses in Australia’s nickel sector, amid expectations of a global oversupply in 2024; Indonesia in particular intends to ramp up nickel production via Chinese investment in the sector.

CORPORATES
PANORAMIC RESOURCES LIMITED – ASX PAN, FTI CONSULTING PTY LTD

Builders hit a high for insolvencies

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Original article by Michael Bleby
The Australian Financial Review – Page: 28 : 3-May-23

Data from the Australian Securities & Investments Commission shows that an additional 71 businesses in the construction sector were declared insolvent in April. There have now been 1,672 construction industry insolvencies so far in the current financial year; this is the highest level since 2014, when 1,802 companies collapsed during the equivalent period. The Association of Professional Builders’ co-founder Russ Stephens says the construction sector has been too dependent on cash flow, with many firms facing financial problems once cash flows started to decline.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, ASSOCIATION OF PROFESSIONAL BUILDERS

Construction insolvencies approach decade high

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Original article by Michael Bleby
The Australian Financial Review – Page: 29 & 31 : 19-Apr-23

Data from the Australian Securities & Investments Commission shows that there were 524 insolvencies in the construction sector in the March quarter and 1,601 in the first nine months of 2022-23. Australian Restructuring Insolvency & Turnaround Association CEO John Winter says the number of insolvencies in the sector is on track to exceed the decade-high of 1,802 recorded in fiscal 2014. He adds that the residential construction sector is suffering a severe hangover after years of a surge fuelled by cheap credit.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN RESTRUCTURING INSOLVENCY AND TURNAROUND ASSOCIATION

REDcycle declared insolvent after handing plastic stockpile to supermarket giants

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Original article by Chris Vedelago
The Age – Page: Online : 28-Feb-23

The NSW Supreme Court has issued a winding-up order for RG Programs & Services Pty Ltd, which operated the failed REDcycle scheme for soft plastics packaging. A liquidator has appointed to the company, which is likely to signal the end of the REDcycle scheme. However, this will not affect a recent deal for Coles and Woolworths to assume control of a 12,400-tonne stockpile of soft plastics that is currently being stored in 32 warehouses in three states. The supermarket giants will continue to store the stockpile until they determine how to recycle the waste material.

CORPORATES
RG PROGRAMS AND SERVICES PTY LTD, REDCYCLE, SUPREME COURT OF NEW SOUTH WALES, COLES GROUP LIMITED – ASX COL, WOOLWORTHS GROUP LIMITED – ASX WOW

Openpay not the last BNPL failure

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Original article by David Swan
The Australian – Page: 15 : 8-Feb-23

Splitit CEO Nandan Sheth warns that more ‘buy now, pay later’ providers are likely to collapse, after Openpay was placed in the hands of receivers from McGrathNicol. Sheth contends that Openpay’s business model was "fundamentally flawed", and he is not surprised about the company’s demise. He notes that many BNPL providers focus on subprime consumers who may not have credit; he adds that Splitit uses a customer’s existing credit from a credit card issuer, while it deals with merchants rather than consumers. Openpay has retrenched about 80 employees and shut down its platform, and McGrathNicol is seeking a buyer for the company.

CORPORATES
OPENPAY GROUP LIMITED – ASX OPY, McGRATH NICOL AND PARTNERS SERVICES PTY LTD, SPLITIT PAYMENTS LIMITED – ASX SPT