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Administrator KordaMentha is hoping to cement a deal with Helmsman Funds Management to buy the mining arm, which, if sold, will secure up to 535 jobs. This number includes workers from the Parramatta Station, the Bondi sewerage treatment plant and Burnett River Dam projects.
"Following a review of the contracts and operations of Walter, it was apparent that excluding the mining business and select individual contracts, the business was loss-making and could not be traded on for any significant time in administration," KordaMentha's Martin Madden said in a report to creditors.
"The focus in dealing with the non-mining divisions was to collect amounts owing to Walter, negotiate an orderly handover of projects to the principals, secure the company records and assets, minimise liabilities, vacate sites, and pass on insurance and site risk to the principals."
WCG went into administration in February.
WCG recorded 2004 turnover of about $490 million and employed about 950 people. The company had been making losses over the past four years, totalling $65.6 million. It continued to operate with financial support from German parent company Walter Bau, but could not continue to run once the latter went into insolvency.
In 2002, WCG was put on the market, but eventually pulled out, despite interest from a number of parties.
Madden said secured lenders Deutsche Bank and Bayerische Landesbank were owed about $37 million, and unsecured creditors were due more than $90 million. It was "more than likely" unsecured creditors would not see any return.
The secured lenders did not have a claim over WCG's plant and machinery, so employees should be paid before the bank. Employee entitlements total about $27.5 million, of which KordaMentha expects to realise about $20.5 million.
Last month, the administrator also raised concerns that some directors of the construction firm knew the company was insolvent while it was still trading. Further investigation was required to determine the point at which the company became insolvent, Martin said.
Disgruntled WCG employees are expected to rally outside Deutsche Bank today.
