SA Structural debts top $64m as union hopes for white knight

Creditors of failed steel company SA Structural – including family-owned businesses and staff owed unpaid super – have learned its debt is even bigger than feared.

Tayla Rogan has been left thousands of dollars out of pocket following the collapse of SA Structural. Picture: Tom Huntley

Creditors of failed steel fabricator SA Structural have upped their claims against the company to more than $64m while a major union is clinging to hope a white knight can be found to resurrect the business and re-employ staff.

Meeting with administrators for the first time on Tuesday, creditors heard the debt estimate had escalated in recent days, with the company’s landlord claiming $18.6m for future rent payable under a 10-year lease.

Close to 200 other creditors, including the ATO and suppliers, have been left chasing close to $34m.

That’s on top of about $12m owed to secured credit NAB, which appointed receivers and managers to take control of the company’s affairs days after administrators were appointed.

While larger creditors risk losing millions of dollars from SA Structural’s demise, it has also hit local small and medium-sized businesses.

Hein Becker and wife Lynn employ 21 workers at Hughes & Hill Fabrication in Lonsdale.

They say they’re owed $57,000 after providing fabrication services to SA Structural for close to 15 years.

Lynn Becker and husband Hein Becker say their business, Hughes & Hill Fabrication, is owed $57,000. Picture: NCA NewsWire / Emma Brasier

“The company always dragged its feet but we always ended up getting the money – in the end though it bit us in the bum,” he said.

“It hurts, and it doesn’t help us with what’s happened with SA Structural, because we’re all in the same industry and the industry has suffered for many years.

“Competition, and in general the way the whole building industry works, it always works in the favour of the builder and it has for many years.”

C lose to 200 workers lost their jobs on Mondayfollowing the decision by receivers and managers Deloitte to permanently close down one of the state’s biggest steel fabricators.

Deloitte is currently seeking expressions of interest from parties interested in recapitalising the company, buying the entire business operation or acquiring individual assets.

Australian Manufacturing Workers’ Union state secretary Peter Bauer is holding out hope for a competitor or other investor to swoop in.

AMWU state secretary Peter Bauer AAP Image/Kelly Barnes

“Our members there are now facing dire straits financially, so if someone can come in and take over the company or at least take over part of the company’s operations and provide opportunities for employees then we’d be very grateful for that,” he said.

“It’s a tough situation out there, we’re going through the pandemic – we’re going to provide as much support as we can to our members.

“It’s a challenge facing all manufacturers at the moment – we need to be providing opportunities for local manufacturers to get work, and providing support to local manufacturers.

“The virus has shown us that when overseas manufacturers can’t provide services everyone suffers.”

Staff affected by SA Structural’s collapse are owed around $3.6m in unpaid superannuation, according to administrator Andre Strazdins from BRI Ferrier, who confirmed super hadn’t been paid for more than 12 months leading up to the company’s collapse.

Corey Edwards, who attended Tuesday’s meeting after three years working in SA Structural’s finance department, said he was owed around $11,000 in super and a further $25,000 in other entitlements.

“My role for the last 12 months was going through all the finances of the projects, doing all the revenue forecasts, so I knew what revenue was coming in each month, and it was going down and down,” he said.

“We were getting hit with delays because we couldn’t deliver the steel because we couldn’t buy the steel – there was no money.

“They just tried to grow too damn quick – they didn’t have the discipline or the processes, or the accountability.

“They could have done this 12 months ago and they would have had something to save – they would have been nowhere near the position they’re in now.”

Tayla Rogan spent more than a year working at SA Structural as an apprentice CNC machine operator.

Tayla Rogan has been left thousands of dollars out of pocket following the collapse of SA Structural. Picture: Tom Huntley

She left the company last July after seeing the writing on the wall.

“I left last year and so did a lot of other SA Structural employees as we were treated unfairly and could see the company failing,” she said.

“One by one the whole area that I worked in left the company.

“We knew for a while the company was going down because they set deadlines that were just impossible to meet, we weren’t getting paid our full JobKeeper and we weren’t being paid super.”

SA Structural was established by Adelaide businessman Michael Mangos in 2003, providing structural steel for mining projects, infrastructure works, shopping centres, schools and hotels.

The company relocated to its 13,000sq m facility in Edinburgh in 2018, but less than two years later sold the property to investor Centuria for $19.5m, as part of a 10-year sale and leaseback arrangement.

Around 15 projects have been left scrambling for alternative steel supplies.

It is understood three of those are based in Victoria, while local projects include the $715m Gawler train line electrification project and a number of school upgrades.

Mr Mangos did not return calls.