Downturn in the mining sector has hurt revenues, but McGrath Nicol says the underlying business is profitable
An insurmountable cash flow and debt crisis has placed MJ and CM West Transport in the hands of receivers.
McGrath Nicol partner Rob Kirman was appointed on September 16, and says he hopes to sell the Perth-based business as a going concern.
“It’s a good business that still generates strong earnings. It has strong customer and employee bases,” Kirman says.
“Our strategy will be to maintain the business in its current state.”
MJ and CM West Transport had a period of administration from December last year.
That ended when a deed of company arrangement was accepted by creditors.
Kirman says the family directors took on a significant amount of debt as part of that transaction.
Shrinking margins and intense competition for the smaller amount of transport work coming out of Karratha and Port Hedland have meant this year’s revenues could no longer service the associated debt burden.
Kirman says the business itself remains solvent and profitable.
It includes a “modern, well-equipped transport fleet,” including prime movers, semi-trailers, rigid trucks, and Hiab cranes.
The company’s “skilled and longstanding workforce” provides for a “comprehensive range of logistical services, including project management, container packaging, and inventory management”.
Kirman is now accepting expressions of interest for the business.