Administrators called in to McAleese before recapitalisation plan vote

Administrators are appointed to transport firm McAleese ahead of a shareholder vote on a rescue deal.

McAleese’s Mark Rowsthorn. Pic: Dan Himbrechts

McAleese has collapsed just hours before a shareholder meeting that had the potential to oust five of the embattled group’s six directors, including chief executive and former rich lister Mark Rowsthorn.

The transport group (MCS) had been battling a backlash from shareholders over a proposed company-saving recapitalisation plan with Hong Kong debt trader SC Lowy, but investors will not be given the opportunity to vote on the plan after administrators McGrath Nicol were called in this morning.

The stunning turn of events came after one of the two conditions associated with the forbearance arrangements tied to the deal was not met by last Friday’s deadline, with a reduction in McAleese’s annual real property rental costs from TTPH Pty Ltd not achieved.

The development allowed SC Lowy to immediately call for repayment of its senior debt, and with no other forbearance agreement offered, McAleese’s board believed the group was either already insolvent or about to become insolvent.

“The recommending directors are disappointed that despite having proposed the recapitalisation, which provided shareholders with an opportunity to participate in a recapitalised McAleese with substantially less debt and which the independent expert considered to be in the best interests of shareholders, McAleese is now in voluntary administration and shareholders are highly unlikely to receive any value for their existing shares,” the company said in a statement.

“Notwithstanding the voluntary administration, McAleese understands that the SC Lowy consortium and the Rowsthorn interests will continue to seek to implement an alternative transaction which otherwise reflects, in substance, the overall transaction contemplated by the recapitalisation.”

McGrath Nicol said it intended to maintain business as usual at McAleese as it sought to properly assess the group’s operations.

“The administrators intend to continue to operate all four business units in the short-term while they undertake an urgent financial and operational assessment on a business-by-business basis,” the group said.

“The objective of the administrators is to work closely with management, employees, suppliers and customers to keep operations running as smoothly as possible and to determine an appropriate strategy for each business unit.”

McGrath Nicol is in “advanced negotiations” with creditors in a bid to receive a short-term funding facility to keep the group trading, while a sale of the Cootes Transport unit — which was already on the market — will continue.

The first meeting of creditors has been convened for September 8.