Creditors vote to liquidate Forge

FORGE Group’s assets are set to be liquidated after the company’s creditors voted in favour of the move at a meeting yesterday.
Creditors vote to liquidate Forge Creditors vote to liquidate Forge Creditors vote to liquidate Forge Creditors vote to liquidate Forge Creditors vote to liquidate Forge

 

Andrew Duffy

The vote followed a recommendation from administrators Ferrier Hodgson that Forge be placed into liquidation, with the administrators now continuing on as liquidators.

Ferrier Hodgson said while its assessment was preliminary, it had identified a number of key contributors to Forge’s collapse, including rising costs and a general market turndown.

“Income for the period to January 21, 2014 was well below what was budgeted while costs were significantly higher,” it said in a presentation to creditors.

Insufficient risk control, limited diversification, an aggressive approach to acquisitions, a debt-focused capital structure and failed restructuring efforts were also seen as the main causes of failure.

While investigations are ongoing liquidators said questions remained over the timing of several actions and whether Forge had traded while insolvent.

In other areas Ferrier Hodgson said short and long-term bonuses and entitlements had been paid to Forge’s directors but work was still being processed for employee entitlements.

It said calculations on that front were expected to be done within three to four weeks.

Moving forward it said it would continue to make investigations into Forge and to work on verifying and distributing employee payments.

Negotiations are also underway to finish outstanding contracts, including work on the troubled Diamantina power station in Queensland and Rio Tinto Cape Lambert power station in Western Australia.

Forge’s US and west African entities are not in any formal administration and are stand-alone businesses not affected by Ferrier Hodgson’s appointment.

Forge shares remained in a trading halt at A91.5c today.

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