Intermodal operator Wakefield Transport may be sold off as a means of ensuring the company can continue to service the
Intermodal operator Wakefield Transport may be sold off as a means of ensuring the company can continue to service the Mildura area.
Accountancy firm Deloitte, which was appointed administrator of Wakefield last month, is fielding enquiries from buyers interested in purchasing the company, which encompasses the Wakefield Transport Group, Timeline Transport, Ironhorse Intermodal and the Storage and Distribution Network.
Simon Wallace-Smith, a partner of Deloitte’s Corporate Reorganisation Group, last week wrapped up the first creditors’ meeting, saying he is confident of selling off Wakefield’s assets.
“We received a reasonable amount of interest and we also have our list of potential people we will be dealing with directly as well,” Wallace-Smith tells ATN.
“We are selling it as one and we will allow the buyer to do what they want with the entities so they can do their own restructuring.”
Wallace-Smith declined to name the list of buyers that have expressed interest in purchasing Wakefield Transport.
As part of the sales process, Deloitte is running advertisements for expressions of interest in the Wakefield Group, which close on April 14.
The next creditors’ meeting is due to be held in about two to three months, Wallace-Smith says.
The future of the company is expected to be determined at the meeting, as a decision will be made whether to end the administration, execute a Deed of Company Arrangement or place the company in liquidation.
Wakefield’s decision to go into voluntary administration ignited debate last month over whether the State Government was to blame because of poor investment in the rail network.
Wallace-Smith says the company made the decision to go into voluntary administration because of the state of the rail network, the high Australian dollar and the drought, which led to reduced volumes of freight.
“The upgrade to the Mildura line has taken longer than what was anticipated,” Wallace-Smith says.
“Therefore, the efficiencies couldn’t be realised and that’s still probably another 18 months away from being completed.”
This was compounded by Wakefield’s decision to launch a new business called Storage and Distribution Network about 18 months ago, which Wallace-Smith says took longer to establish and came with significant information technology costs.
“This has led to a drain of cash from the main freight business,” he says.
Despite uncertainty surrounding the company, it is continuing to trade, with suppliers and customers flagging the idea of increasing the volume of freight to be carried.
Furthermore, Wallace-Smith says he has reached a negotiated position with Pacific National to ensure the transport operator continues running its rail service.
Meanwhile, there are warnings the Victorian economy will suffer if Wakefield Transport collapses.
VTA Deputy Chief Executive Neil Chambers says the service offered by Wakefield cannot be delivered by any other company in the region.
Wakefield is responsible for the warehousing and transportation of regional produce in Victoria, New South Wales and South Australia. It handles containers, maintains and uses specialist transport equipment, and provides cold storage facilities to service the wine and grape industry.
While other transport operators service rail and road throughout the region, Chambers says they cannot deliver the comprehensive service offered by Wakefield.