Bridgeman circles as creditors meet to decide fate of Toowoomba Engineering

Creditors will meet on Tuesday to decide the fate of a troubled Toowoomba company that went into voluntary administration owing more than $2 million. One option is to liquidate the business while another will see it absorbed by a competitor.

Queensland manufacturing giant Bridgeman is circling Toowoomba Engineering and has put forward an offer to take over part of its operations as a possible administration looms.

The takeover will be one of the options on the table when creditors meet on Tuesday to decide the Garden City company’s fate.

Readyfab Pty Ltd, trading as Toowoomba Engineering, went into voluntary administration in July with debts to unsecured creditors of more than $2.144 million.

At the meeting, the creditors will vote to either liquidate the company or place it under a Deed of Company Arrangement.

Australian Security and Investment Commission documents show the administrator, McLeods Accounting, was approached by Bridgeman’s director Adam Sarota, who said he was looking for opportunities to expand its business and presence in the Toowoomba region. The lead administrator Bill Karageozis, in his report to creditors, advised that preserving Readyfab’s business, customers and employees was a vital part of preserving the company’s value and it had the potential to maximise returns to all stakeholders.

This would preserve the employees’ jobs and allow for unfinished orders to be completed while reducing a portion of Readyfab’s liabilities.

The creditors report states that if Readyfab was liquidated, unsecured creditors could at best receive two cents to the dollar. Under a DOCA, the best they can hope for is four cents to the dollar.

This is despite some of them being owed tens of thousands of dollars.

In his report to creditors, Mr Karageozis states that in his opinion, the DOCA represents the value for creditors.

The creditors report lists the resale value of its assets at $642,144. A review of the company’s assets found that selling its office furniture would raise about $338,811 while calling in debts owed to it would fetch $238,544.

The administrator, McLeod Accounting, wrote to some of these debtors on July 21 and demanded payment of money owed to the company.

It is expected that all of this money will be paid.

Readyfab’s liabilities total $2,753,650, with $2,412,430 owed to unsecured creditors, $262,746 to secured parties and $78,470 owed to staff.

Bridgeman and McLeods were contacted for comment but declined the offer.