Major Melbourne company collapses owing $29m

The 60-year-old company was involved in sporting events such as the Australian Open but is now facing being closed for good as employees were left in limbo.

An Australian manufacturer, with sites in the US and Malaysia, has collapsed owing a staggering $29 million.

The 60-year-old company, called Camatic Pty Ltd and trading as Camatic Seating, designed, manufactured and installed seating in stadiums, arenas, cinemas, theatres, educational institutions and transit areas around the world.

On its website, the firm boasted it had created seating for “some of the biggest stadiums and arenas in the US” which are home to American football teams, as well as the Australian Open tennis tournament.

But the company went bust at the start of April when it was placed into voluntary administration with Jason Stone and Glenn Franklin from insolvency firm PFK appointed to oversee it.

The company employed approximately 77 employees and “numerous” staff were terminated or stood down by the administrators as wages were unable to be paid, the administrator’s report noted.

Camatic went bust owing $29 million. Picture: Camatic

A letter leaked to news.com.au showed a request from administrators for employees to agree to be stood down without pay from 10 April to 3 May.

“The reason for the stand down is that the majority of the company’s operations have been put on hold for the time being resulting in stoppage of work where certain employees (including yourself) can no longer be usefully employed,” the letter read.

However, with the company likely to fall into liquidation those employees are set to permanently lose their jobs.

Employees are owed approximately $3.6 million including unpaid wages, superannuation, annual leave, long service leave and redundancy pay, according to the administrator’s report.

It also revealed that the company had racked up debts worth $29.4 million.

The company had been operating for 60 years. Picture: Camatic

The biggest creditor is HSBC, which is owed $11.2 million from loans, a mortgage, credit card and bank overdraft.

Outstanding debt for unsecured creditors totalled $14.9 million including trades, the report said.

The ATO has lodged a debt notice worth almost $250,000, while the State Revenue Office of Victoria notified administrators they are owed $331,000.

At the time of the company’s failure, there were 123 projects both locally and internationally that were left in limbo, although some were completed during the administration period, the report noted.

A number of parties had also laid claims to stock within the manufacturing plant worth between $748 and $114,000 with the likes of 27 steel pallets, plastic beads, a printer, fibreboard and a chemical outlined in the report.

It installed seating in the cinema. Picture: Camatic

Mr Franklin said the company’s failure was a result of difficult trading during the Covid-19 lockdown period, especially in relation to freight as a global exporter, driving a declining financial position.

He added the company was further stretched by opening a manufacturing plant in Malaysia during the Covid-19 lockdown period, without the required opportunity for management to travel and supervise the set up.

Apart from the Australian manufacturing site which was located in Melbourne, it also operated Camatic US which was responsible for projects in the region.

There was also Camatic Malaysia, a manufacturing facility which serviced both Australia and the US, the administrator’s report noted.

It had worked with the Australian Open. Picture: Camatic

The business has been advertised for sale with two offers received, the administrators report revealed, although negotiations were ongoing.

Mr Franklin has recommended the company be placed into liquidation with a meeting for creditors scheduled on May 10.

News.com.au reached out to the administrators for comment but they did not respond to requests.

Meanwhile, Camatic Group had previously posted on Instagram that it had spent more than two decades supplying seats to the Australian Open tennis tournament.

This included Rod Laver Arena, Margaret Court Arena, John Cain Arena and more recently Kia Arena development featuring more than 5,000 Quantum seats.

“All of which were manufactured and assembled less than half an hour’s drive away from the venue at our Melbourne facility,” the post from the company said.

Camatic was also responsible for installing seats at the Sydney Football Stadium, which opened in mid-2022 with more than 42,000 Axiom seats installed, according to its Instagram.

It’s American football credits included the Mercedes-Benz Stadium – home of American football team Atlanta Falcons, SoFi Stadium – home of the Los Angeles Rams and Chargers, and Climate Pledge Arena, home of the Seattle Kraken.

It had operations in the US and Malaysia. Picture: Camatic

Camatic’s demise comes as a record number of businesses across Australia are collapsing.

Credit reporting agency CreditorWatch revealed that the number of external administrators appointed to Australian businesses had hit a record high and was now 22.1 per cent higher than a year ago with the construction sector most prominently impacted.

Manufacturing outfits are starting to emerge as another industry being hard hit.

Last month, a national roof manufacturer, Lutum, went bust owing $20 million.

Victorian-based Highline Caravans collapsed this month with debts of more than $1 million.

Melbourne (Wholesale) Roller Shutters went into liquidation in March leaving a trail of creditors owed more than $900,000, including up to 20 customers who had paid deposits but never had the work done.

Another Melbourne-based company MadeCo, which was responsible for kitchen manufacturing, went bust leaving it $2.5 million in debt last month.

Other recent collapses include workers at two NSW factories who slammed their former employer after the company went bust, leaving them and other creditors multiple millions out of pocket.

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Originally published as Major Melbourne company collapses owing $29m