Aerison Group (ASX:AE1) - Case Update

Craig Shepard, John Bumbak and Richard Tucker of KordaMentha have given an update on their administration of the Aerison Group (ASX:AE1), a Perth-based engineering and construction firm that entered voluntary administration on 6 June. Historically profitable, the company recently ran into contractual disputes on two significant construction projects with BHP and Roy Hill. With approximately $89.0 million in dispute, the company’s financial position was significantly weakened. Attempts to recapitalise the business were ultimately unsuccessful as the group ran out of time and liquidity. In May, the group engaged KPMG as Safe Harbour adviser, and legal advisors Clayton Utz subsequently introduced KordaMentha to the group. Since their appointment, the administrators have continued to trade the business, supported by a fresh $5.0 million working capital facility from Avior. A concurrent sale and recapitalisation process yielded four strong offers for the group’s business, and administrators are recommending that creditors accept the bid from competitor Pacific Industrial Company, which could see unsecured creditors recover as much as 36.5 cents in the dollar. The administrators have also lined up litigation funding to support the group’s litigation against Roy Hill, which is expected to be commenced following the second meeting of creditors.