The Australian Securities and Investments Commission wants more details from the administrators of failed ASX-listed Penrice Soda Holdings, who say they have clear grounds to pursue an insolvent trading claim against directors for as much as $22.5 million.
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McGrathNicol partner Sam Davies told creditors on Thursday he believed Penrice had been trading insolvently for at least nine months before it was placed in administration on April 11 with more than $150 million of debt.
He informed ASIC, the corporate regulator, which asked for more detail as part of its own examination. “We have formed a view that the company has been trading insolvently.”
He said McGrathNicol believed Penrice was already insolvent on July 1, 2013, because banking facilities with National Australia Bank and Westpac, now owed $111 million in total, were already fully drawn and cash-trading losses were being incurred.
Statutory authorities and regulators such as the Environment Protection Authority and Revenue SA were not having their debts paid either.
An air of resignation pervaded the second meeting in Adelaide of 60 creditors, including dozens who will not receive anything. Andrew Milton, from Milton Transport, is owed $245,000 and wanted to know if the $2 billion listed cement group Adelaide Brighton would still need aggregate and other minerals transported from the quarry it bought from the administrators.
The question was referred to Adelaide Brighton.
McGrathNicol shut down the only other Penrice asset, an aging chemicals plant in the Adelaide industrial suburb of Osborne, in June, costing 100 jobs.
Creditors voted to liquidate the company on Thursday.
Mr Davies said a lot more work was needed on the proposed insolvent trading claim and its funding. There was a clear basis for proceeding, but it might not succeed because of legalities.
“That is a very detailed piece of work.” He said directors had indemnity insurance and the underwriter of those policies had already been notified.
Two directors, former chief executive Guy Roberts and former deputy chairman Andrew Fletcher, were both at the meeting on Thursday, but former chairman David Trebeck was not.
Mr Trebeck said in a statement: “The directors greatly regret that Penrice is being wound up.”
He said the executive team and staff had worked tirelessly to try to turn around the company’s fortunes “in particularly difficult industry conditions over the past two years”.
Other corporate creditors at the meeting included Envestra, the Clean Energy Regulator, Momentum Energy, Flinders Ports and Qube Logistics.
