Administrator shuts the gates at 1st Fleet after funding lifeline is cut off
By Brad Gardner | May 3, 2012
1st Fleet has ceased trading after a fresh round of funding to keep the business going failed to come through.
Accountancy firm deVries Tayeh, which was appointed administrator last week, announced at 11.55pm yesterday 1st Fleet had closed its doors.
Employees were left stunned when they turned up to work this morning and were handed redundancy notices. Workers were locked out, and the closure of 1st Fleet is expected to cost hundreds of jobs nationwide.
“deVries Tayeh, the Administrators of the 1st Fleet Group advised that the Group’s line of funding was not extended due to the director’s inability to meet certain pre-arranged commitments,” the firm says in a statement, without explaining what the commitments were.
“Without this line of funding the business could not continue.”
However, deVries Tayeh adds that there are “many transport operators” that have shown interest in purchasing parts of the business, which includes express and linehaul services.
“Our discussions are continuing, obviously on an even more urgent basis now, to facilitate any sales and with that salvaging jobs for the workforce and recommencing services to 1st Fleet’s customers,” the firm says.
DeVries Tayeh says the situation will become clearer in the coming days.
A NSW-based 1st Fleet driver, who declined to be named, says he is owed wages and superannuation.
“There’s a lot of people that haven’t been paid,” he says.
“I don’t see us getting any money. I won’t be getting paid.”
Termination letters handed to workers say deVries Tayeh assessed 1st Fleet’s viability and determined it did not have the ability to trade.
“These circumstances have left the Administrators with no other options but to terminate your employment effective as of 2 May 2012, and advise that this letter constitutes notice of termination of your employment,” the letter reads.
A creditors meeting will be held on May 7 in Sydney.
The move came despite 1st Fleet Managing Director Stephen Brown expressing confidence in the future of the business earlier this week.
“We’ll get through this. I wouldn’t have got into it [voluntary administration] if I didn’t think I could get out of it,” he told ATN on Tuesday.
Brown says clients expressed their support for the business, which struggled to retain cashflow in the face of rising costs and stringent loan conditions.
1st Fleet General Manager of National Operations Darren Garvin also told ATN last week late payment terms had a big impact on the business, with some clients taking up to 90 days to settle accounts.
The company that provided 1st Fleet with linehaul services, Linehaul Solutions, sent a letter to its workers on April 26 saying it would incur losses of more than $500,000 due to 1st Fleet’s inability to pay its bills.
The letter says the company would be lucky to receive five to 10 cents in the dollar on about $500,000 over a 24-month period.
Australian Trucking Association (ATA) Government Relations and Communications Manager Bill McKinley expressed sadness over the demise of 1st Fleet.
The company was part of the ATA’s TruckSafe program, and McKinley says it was “an extremely safe” outfit.
“It’s a tragedy that its administrators have needed to cease trading, and all our thoughts today are with its staff and sub-contractors,” he says.
