Administrators strike deal to keep Wakefield Transport alive
Almost a year since it went into receivership, a deal has been struck to allow the Victorian-based Wakefield Transport to continue trading.
Three individual investors have received creditor approval to restructure the company, whose failingsl was partly blamed on Victoria’s poor rail infrastructure.
Under the deal, the investors will become major shareholders of Wakefield, which Deloitte says will allow the Mildura-based company to continue “as a going concern”.
The investors are directors of Seaway, a group of existing shipping and logistics companies based in Melbourne, Sydney, Brisbane and Adelaide.
The business will be restructured through an equity injection, while the investors will buy 57 percent of Wakefield’s shares.
A new board of directors including Ken Wakefield will be formed. The new directors will be Craig McElvaney, Peter Wallace and Paul Szumowski.
Deloitte says the restructuring is expected to begin on March 1 after legal documents are drawn up.
Administrator Simon Wallace-Smith says he wanted a better result for creditors, but still considers the deal a good outcome.
“Under the proposal, the business will be allowed to continue as a going concern, the great majority of employees will not be affected, which will benefit the surrounding community, and unsecured creditors will receive a dividend,” Wallace-Smith says.
“I’m pleased we have reached a positive outcome. It means a lot to Mildura and the surrounding district to have the Wakefield Transport Group continuing to trade.”
Wakefield went into receivership in April 2008, which Deputy Mayor of Mildura Vernon Knight claimed was due to the poor investment in regional rail infrastructure by the State Government.
Deloitte looked at selling off the company, which encompasses the Wakefield Transport Group, Timeline Transport, Ironhorse Intermodal and the Storage and Distribution Network, to ensure it continued trading.
Wallace-Smith was confident of distributing the assets, saying the move received a reasonable amount of interest following a creditors meeting early last year.
“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 said at the time.
As well as an inefficient rail network, Wallace-Smith told ATN last year Wakefield’s decision to launch a new business also affected its viability.
He said the Storage and Distribution Network took longer to establish and was plagued with significant technological costs.
“This has led to a drain of cash from the main freight business,” he told ATN.
The rail freight forwarder is responsible for the warehousing and transportation of regional produce in Victoria, New South Wales and South Australia.
Wakefield also handles containers, maintains and uses specialist transport equipment, and provides cold storage facilities to service the wine and grape industry.