Wettenhalls Express severed to save group


Warrnambool office also goes as 126 employees lose their jobs and entitlements in eastern states and South Australia

January 29, 2013

Receivers Ferrier Hodgson will close Wettenhalls Express to allow the remaining parts of the group
to find a buyer or buyers.

The group’s Warrnambool office will also close.

There will be 126 redundancies with worker entitlements to be picked up by the Fair Entitlements Guarantee.

The breakdown of job losses is: Laverton 63, Warrnambool 27, Yennora 15, Rocklea 11, Gillman eight, Lara two.

"Unfortunately, as a result of our investigations over the weekend, it has become clear that there is no option but to close the Express business and the Warrnambool office," Brendan Richards, one of two receivers and managers, says.

"The Express business operated in a low-margin, highly competitive environment where it provided a fairly generic offering.

"With depressed transport volumes being experienced across the industry, it became impossible to maintain the viability of the business."

Transport Workers Union Victoria/Tasmania Branch Secretary Wayne Mader says the move will impact on, and the union will support, the 42 Victorian
unionised employees, including 34 drivers, involved.

He believes the receivers are more optimistic about selling the rest of the group.

Prospective buyers have just three days to get their expressions of interest in.

Earlier, Ferrier Hodgson nominated Friday as the deadline for the group.

This
is just before the week starting next Monday in which BDO Chartered Accountants voluntary administrators Luke Targett, Rachel Burdett-Baker and Dennis Turner expect to conduct the first creditors’ meeting.

In a circular to subcontractors on Sunday, the other Ferrier Hodgson receiver and manager, George Georges, says his firm would look to a trade sale as providing "the best prospect of future work for Wettenhalls Group subcontractors and employees".

Backing up an earlier statement that it would be business as usual while an "urgent assessment" was made of the group’s financial position and future, terms and conditions would continue unchanged and accounts would be paid in accordance with usual terms of credit or those agreed with the receivers.

The group’s subsidiaries were named as Logistics Group Investments, Wettenhalls Group Logistics Amezdroz & Son and Wildan Transport.

Separately, Georges told employees on Sunday that a sales process for the business as a going concern had started before Ferrier Hodgson had been appointed.

He asked employees to secure assets against theft and not allow customers to recover stock without the receiver’s "express permission".

The expressions of interest invitation notes the group’s control of eight sites, a fleet of over 180 trucks and 300 trailers, client base of 700 and turnover of more than $120 million in calendar year 2012, though BDO put the last figure at more than $130 million.

Sources with an understanding of the group say a sale of the group as a whole is likely to be complicated by debts and shortfalls involving suppliers, creditors, subcontractors, taxation and superannuation.

BP had no comment to make on speculation that it was owed $3 million.

Meanwhile, the Transport Worker’s Union’s New South Wales branch says that the closure of Wettenhalls Express at Yennora had cost work for 16 owner-drivers and eight employees at the Yennora site.

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