Dozens of jobs in doubt
DOWNTURN finally catches up with one of region's oldest businesses.
Tuesday 30 August 2016
One of the region's oldest and biggest freight businesses with depots in Gladstone, Mackay, Rockhampton, Biloela, Emerald, and Moranbah has entered into administration.
Administrators McGrathNicol were called in on Monday to take over management of McAleese Transport after a proposed rescue package failed just hours before being voted on by investors.
Despite McAleese releasing a statement saying shareholders are highly unlikely to receive any value for their existing shares following administration, McGrathNicol have said it will be business as usual for employees for the next month or so.
“We intend to continue to operate all four business units in the short-term while we undertake an urgent financial and operational assessment on a business-by-business basis,” McGrathNicol 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.”
More will be known following a first creditor meeting for McAleese on the 8th September, by which time McGrathNicol hopes it can confirm a short-term funding arrangement with creditors to keep the business going.
While the final nail in the coffin for McAleese was the inability of the company to re-negotiate new lease rates for its depots around Australia, the company has been struggling to survive since the start of the mining downturn.
As far back as 2014, they acknowledged that demand for their heavy haulage and lifting business was collapsing faster than predicted in the resource states.
They also lost key contracts with Shell and BHP and had higher maintenance and contractor costs in oil and gas which ate into margins during the CSG construction phase.
Things got worse when their biggest client - Atlas Iron in WA - came close to collapsing last year, which forced them to renegotiate their contracts so that Atlas could stay in business.
In their non-mining business the company was also punished when their newly acquired Cootes transport business was forced to stop working until they could prove their trucks were safe following a fatal incident involving one of their drivers.
McAleese started in Mackay back in the 1930's.