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Heavy Haulage Australia goes into voluntary administration

Heavy Haulage Australia goes into voluntary administration

Heavy Haulage Australia (HHA) owned by well-known TV identity Jon Kelly has gone into voluntary administration.

Ferrier Hodgson partners Mr Brendan Richards, Mr John Lindholm, and Mr Tim Michael have been appointed Voluntary Administrators of the high-profile, heavy haulage logistics specialist.

This comes as the business sold a 50% stake of the business to McAleese in November last year.

Established in 1999, HHA specialises in 4 to 8,000 tonne haulage movements for infrastructure, mining and special projects.

The company is a recognised industry leader covering many facets including, transportation, cranes, electrical wire, haulage consultancy, storage services, SPMT trailers, heavy haulage fleet leasing and specialist haulage services for the oil and gas, power, rail, refinery and infrastructure sectors.

HHA was also a prominent sponsor of V8 Supercars and the subject of the ‘Megatruckers’ series featured on Foxtel’s A&E Channel.

The decision to go into voluntary administration has been made in the best interests of protecting the considerable assets of the company and maximising the prospect for it to continue as a going concern.

Mr Richards, Head of Ferrier Hodgson’s Logistics practice, expressed his disappointment in seeing another high-profile Australian transport business in distress.

“This is indicative of the downturn we are seeing in the resources sector and the knock on effect it has and will continue to have on the transport industry. Unfortunately, HHA has a very high cost base and when revenues are challenged, it is left with little room in which to manoeuvre.”

“We will be working hard to try and achieve a strong outcome for all of the parties involved, but this is a tough time for Australia’s transport industry and heavy haulage businesses in particular.”

In the short-term, Ferrier Hodgson will continue to trade the business as normal while a buyer is sought and arrangements are made to protect the interests of the employees, customers, suppliers and creditors.

A clear strategy and direction for the business is expected to be established within the week.

Back in May McAleese appointed Ferrier Hodgson to review the activities of HHA after the company announced a voluntary exemption from trading following the news that it’s biggest client Atlas Iron was stopping production.

In a statement back then McAleese said the review presented options for improving operations and balance sheet of HHA.

McAleese loaned HHA $4million of working capital since December 31.

McAleese Limited, which owns 50% of Heavy Haulage Australia, is now considering legal recourse from Jon Kelly.

“McAleese Group is considering its options for legal recourse against the vendor (and associated parties) of the company’s shareholding in HHA Group, in connection with the sale process and conduct after that time,” McAleese said in an ASX statement.

“In light of the sustained poor market conditions in the oil and gas and infrastructure sectors and HHA Group’s inability to support the high fixed costs of its lease arrangements, McAleese Group concluded that further investment in HHA Group is unlikely to deliver an acceptable financial return and has withdrawn working captial support,” the statement said.

McAleese now expects a $17million blow to it’s financial results for this financial year relating to loans, accrued interest and other money owed from HHA Group to the company.

“HHA Group’s debts are entirely non-recourse to McAleese Group and as a result the company does not consider that it has any further financial exposure relating to its investment in HHA Group.”

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