Aussie owner of M&E firm Rotary collapses

Aaron Morby 10 years ago
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The future of building services contractor Rotary hangs in the balance as its Australian owner Hastie Group was forced into administration.

The Australian building services giant bought Rotary for more than £100m four years ago as a springboard into the UK.

But the fast-expanding Hastie Group’s fortunes are in tatters after $20m in accounting irregularities were revealed last Friday.

A spokeswoman for Rotary said: “We are fine at the moment and trading normally. We expect a buyer will be found for the business so it just a case of waiting to see what will happen.”

The Rotary Group accounted for around 11% of Hastie Group’s A$1.8bn revenue in 2011, after a period of expansion to create a national network of offices in the UK.

Hastie employ 7,000 across its 44 companies in Australia, New Zealand, the UK, Ireland and the Middle East.

Around 2,700 people were instantly stood down in Australia.

The administrator said several potential buyers had already expressed interest in some businesses within the Hastie Group.

Ian Carson of PPB Advisory said that some of the firms were good trading businesses that would continue, but others would struggle.

He added that the move to suspend operations was “particularly disappointing”, but there was no option.

“We are obliged to confirm Hastie Group’s ability to fund trading before we can resume business,” Carson said.

“We need time to assess the details of the situation and to determine the viability of the ongoing businesses.

“In the meantime, we remain acutely aware of Hastie Group’s role on major construction projects and are assessing those urgently. We will provide an update to employees and other affected parties as soon as possible.”

Hastie Group had been in talks with banks and new investors to extend its loans last week, but they broke down when Hastie discovered an employee had allegedly falsified accounts.

The discrepancies are believed to have totalled a A$20m charge to profits this financial year.

Earlier this month Hastie admitted its earnings for the first half of the year would plummet from the anticipated A$58 million to zero.

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