Financial crisis stopped Troncs buying GR George

Troncs Transport Solutions' plans to buy GR George were scuppered by global financial crisis

By Michael House

Queensland-based Troncs Transport Solutions was close to purchasing failed company GR George in December last year, but its plans were scuppered by the global financial crisis.

Speaking to ATN, Troncs Chief Executive John McNamara says purchasing GR George would have over-extended Troncs and affected its viability.

"We have all seen this economic downturn coming and the issue people are asking is how much you want to extend yourself," McNamara says.

"We want to come through the other side with our people intact and our balance sheet intact."

Troncs, however, may still benefit from deciding against acquiring GR George, with McNamara saying the company will be putting a tender in to take over GR George’s Woolworths contract.

"We currently run a sector for Woolworths and we will be retendering for this and we will also be retendering for some of the ex GR George legs," McNamara says.

Despite the credit crunch affecting the industry, McNamara says Troncs is using 90 percent of its fleet, which is made up of 240 prime movers and 440 trailers.

GR George last month went into administration saddled with debt. SV Partners, which tried to stop the carrier from going into liquidation, says "it was over geared, over capitalised and had a large debt burden".

"The company had substantial losses in 2008 and subsequent to our appointment we had put in some changes to try and turn around its measures, but they weren’t enough to get the company back on its feet," SV Partners Director David Stimpson says.

GR George's 45 prime movers and 51 trailers will be auctioned on April 7, and Stimpson expects the assests to fetch more than $12 million.

He says GR George will be wound down and deregistered once all its equipment has been sold.

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