Mining transport company AL Logistics has gone into voluntary administration as it seeks to secure a $2 million investment to pay its creditors and continue operating.
Mining transport company AL Logistics has gone into voluntary administration as it seeks to secure a $2 million investment to pay its creditors and continue operating.
Ferrier Hodgson has been appointed as the administrator of the 10 year old company which recently returned to operating profitably, but has large debts to both secured and unsecured creditors including fuel suppliers and truck and trailer equipment financiers.
AL Logistics company directors include founder Andrew Woods and former NRW director John Silverthorne, who has invested as a major shareholder.
The directors placed the company in administration to pursue a company restructure and secure a deed of company arrangement.
Mr Silverthorne had previously engaged restructuring firm Avior Consulting to assist with the transition.
Avior Consulting managing director Dermott McVeigh said while the business had fallen victim to the slowdown in the mining industry and its services sector, in the last 12 to 18 months its directors had returned the business to operating profitably.
“The company is now making a profit albeit in these difficult circumstances so it’s actually on a very good platform now to be added to an existing set of operations and significantly improve another company’s profit or be profitable in its own right,” Mr McVeigh said.
“And that takes a lot of work to establish that, especially in an industry that’s as tough as mining services transport right now,” he said.
Mr McVeigh said the company had lost contracts after some of its mining services customers went into administration themselves, and it now owed creditors about $2 million, which it hoped to pay back via an investment within the company in the next six months.
“There’s no defined time frame, it’s quite a flexible mechanism, voluntary administration, so as long as the amount was received within six months we can structure an arrangement with creditors which would facilitate that,” Mr McVeigh said.
AL Logistics provides transport mostly on the routes between Perth, Darwin and the Pilbara and has 31 staff and two contractors.
Mr McVeigh said the intention was to maintain business as usual, keeping all staff for the time being and continuing to provide services to its customers.
He said there had been significant investment interest from WA transport providers.
“There is some interest in it at the minute, it could either be a WA company, or something much larger... whatever transaction we can achieve through a deed of company arrangement would be executed and completed by Ferrier Hodgson,” Mr McVeigh said.
Ferrier Hodgson partner Martin Jones said in a statement it was working very closely with the company’s management and directors to achieve an outcome that was in the best interest of all creditors.
“We have held initial discussions with the company’s main suppliers and I’m pleased at the level of support we have received which will facilitate the continuation of business as usual,” Mr Jones said.
