Revolution Roofing debt revealed amid search for white knight

The huge debt that sunk steel products company Revolution Roofing has been revealed for the first time amid a search for buyers to rescue the business.

The whopping debt that sunk Revolution Roofing and sister company Nexteel has been revealed for the first time in what is emerging as one of South Australia’s largest corporate insolvencies.

Administrators have confirmed the recent collapse of Revolution Roofing has left 530 creditors chasing about $70m in unpaid debts, while Nexteel owes 130 creditors an additional $18m.

The list of creditors includes 200 employees across the two companies who are owed about $3.2m in unpaid entitlements, including superannuation, which is not covered by the federal government’s Fair Entitlements Guarantee safety net scheme.

Administrators were appointed to Regency Park-based Revolution Roofing and Nexteel on December 6 amid soaring steel prices and ongoing supply chain issues.

Receivers were later appointed to take control of the company’s affairs by ASX-listed finance company and secured creditor Earlypay in a bid to recover close to $29m owed to it.

Major unsecured creditors include the ATO ($8.7m), Japanese industrial conglomerate Mitsui & Co. ($4m), US-based steel products manufacturer ITC Manufacturing ($3.1m) and Regency Park landlord Taminga Street Investment ($1.9m).

Revolution Roofing director John Easling is preparing a deed of company arrangement proposal following the collapse of his steel products company. Picture: Matt Loxton

The long list of creditors and massive debt pile makes Revolution Roofing and Nexteel the state’s largest corporate insolvency since the demise of York Civil in 2018.

However the businesses are continuing to trade as creditors and employees cling onto hope a white knight could yet salvage parts of the business.

Receiver David Hodgson from Grant Thornton confirmed he was seeking expressions of interest from potential buyers of the businesses, while company director John Easling is preparing a deed of company arrangement (DOCA) proposal which could see him take back control of the companies as part of a potential deal with creditors.

Administrator Glenn Franklin from PKF said the objective of the DOCA would be to restructure the companies, and it would require the approval of creditors.

“We continue our role as administrators and the director has indicated that it remains his intention to submit a deed of company arrangement proposal for creditors to consider as part of the voluntary administration,” he said.

“The receivers and managers are also conducting a sale of business campaign concurrently with offers to be received by 31 January 2023.

“A further report to creditors will be sent out in the coming weeks once a DOCA proposal is received.”

Earlypay has indicated it would be open to considering a DOCA proposal or potential sale of the two companies, and expects to recover its debt in full.

Mr Easling established steel roll forming company Revolution Roofing in 2009, with manufacturing sites in Adelaide and Perth supplying processed steel roofing, fencing, cladding and other products into the residential and commercial markets.

In 2019, Mr Easling and a group of investors acquired painted coil company ColorGuard, before revamping its product range and relaunching it under the Nexteel brand.

His plans were to shake up the industry and compete head-on with industry giant BlueScope, which holds a virtual monopoly in the market.

However the increased cost of steel, supply chain challenges brought on by Covid-19 and global instability connected with the Ukraine crisis were blamed for the failure of the two companies last month.

Most of the affected workers operate from the companies’ head office in Regency Park, with others located at manufacturing sites in Perth and Newcastle.

Over the years Revolution Roofing has been a major supporter of the Adelaide Crows.

Former captain Mark Ricciuto was a director of the company during its early years from 2011-2012, and previously appeared in a series of TV commercials, including several alongside former Crows captain Taylor Walker.

Ricciuto declined to comment on the company’s demise.