DIPLOMA CONSTRUCTION (WA) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED)

Transcription

1 DIPLOMA CONSTRUCTION (WA) PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Meeting of Creditors 5 January 2017 David Mark Hodgson Joint and Several Administrator Matthew James Donnelly Joint and Several Administrator Andrew Stewart Reed Hewitt Joint and Several Administrator

2 Agenda 1. Introduction Formal meeting requirements Nomination of alternate Administrator (if applicable) 2. Administrators' update 3. Questions 4. Committee of creditors Appointment of a committee of creditors (if required) 5. Closure

3 Introduction 1. Meeting of creditors in accordance with Section 436E of the Corporations Act 2001 ("the Act"). Purpose of meeting is to advise creditors generally about the Voluntary Administration, confirm our appointment as Voluntary Administrators and, if necessary, appoint a Committee of Creditors 2. Chairman David Hodgson in accordance with Regulation of the Corporations Regulations 2001 ("the Regulations") 3. Attendance and proxies Creditors in attendance must have signed the attendance register and lodged with the Administrators a completed proxy form and proof of debt Observers present to sign the attendance register

4 Introduction 4. Voting on resolutions A resolution put to the vote is decided on the voices unless a poll is demanded before or on the declaration of the result of the voices in accordance with Regulation (1) of the Regulations 5. Time and place convenient Notice of meeting (Section 436E(3) of the Act) Meeting is held at a time and place convenient to the majority of persons entitled to receive notice of the meeting, in accordance with Regulation of the Regulations 6. Quorum A quorum is present in accordance with Regulation of the Regulations

5 Introduction 7. Prior involvement of the Voluntary Administrators Declaration of Independence, Relevant Relationships and Indemnities Indemnities and up-front payments FPDL Investments (a related party to the Company) provided an up-front payment of $200,000 to meet our remuneration and expenses associated with the administrations of the Company, DGX Construction and Diploma Group Limited Held in our firm s trust account and will not be drawn to meet our remuneration until such time that it is approved by creditors. There are no conditions on the conduct or outcome of the administration attached to the provision of these funds. If we form the view that we will recover sufficient funds from the assets of the Company to pay any remuneration, fees and costs incurred by ourselves, we will repay the trust funds to FPDL Investments.

6 Introduction 8. Confirmation or removal of the Administrators We have not received any nominations from any other party to act as an alternate Administrator As a consequence our appointment as Administrators stands

7 Administrators update Administrators appointed 22 December 2016 to: Diploma Construction (WA) ("the Company") Diploma Group Limited DGX Construction Receivers and Managers appointed to the above on 21 December 2016 Control of the assets, undertakings and management of the companies is now with the Receivers and Managers Deed of Indemnity and Guarantee The Company acted as the construction arm of the group for internal and external projects, effectively ceased to trade prior to our appointment

8 Group Structure Diploma Group Limited Diploma Construction (WA) DGX Construction Diploma Properties Diploma TCO Holdings Diploma Construction (NSW) Diploma Capital Pty Allegro Realty Holdings Diploma Development Management Weststructure Pty 24 Flinders Lane Pty 176 Adelaide Tce Rockingham Services Apartments Chamlabs Emporium Diploma Capital Securities Allegro Realty Pty Rockingham Waterfront Unit 176 Adelaide Tce Unit Chemlabs Unit 50% Lot 101 Hay Street East Perth 300 Lord St 303 Campbell St Pty 254 West Coast Hwy Subiaco Residential Apartments Lot 101 Hay Street East Perth Unit 300 Lord St Unit The West Coast Unit The Subiaco Residential Apartments Unit Receivers and Managers Appointed Administrators Appointed 50% The Highgate Joint Venture ee capacity 50% ownership Source: Australian Securities and Investments Commission database Company Searches database All other information available to the Administrators as at the date of appointment

9 Group Structure General Security Agreements Diploma Group Limited Diploma Construction (WA) DGX Construction Diploma Properties Diploma TCO Holdings Diploma Construction (NSW) Diploma Capital Pty Allegro Realty Holdings Diploma Development Management Weststructure Pty 24 Flinders Lane Pty 176 Adelaide Tce Rockingham Services Apartments Chamlabs Emporium Diploma Capital Securities Allegro Realty Pty Rockingham Waterfront Unit 176 Adelaide Tce Unit Chemlabs Unit 50% Lot 101 Hay Street East Perth 300 Lord St 303 Campbell St Pty 254 West Coast Hwy Subiaco Residential Apartments Lot 101 Hay Street East Perth Unit 300 Lord St Unit The West Coast Unit The Subiaco Residential Apartments Unit Receivers and Managers Appointed Administrators Appointed 50% The Highgate Joint Venture ee capacity 50% ownership Subject to General Security Agreement Source: Australian Securities and Investments Commission database Company Searches database All other information available to the Administrators as at the date of appointment

10 Group Structure Deed of Indemnity and Guarantee Diploma Group Limited Diploma Construction (WA) DGX Construction Diploma Properties Diploma TCO Holdings Diploma Construction (NSW) Diploma Capital Pty Allegro Realty Holdings Diploma Development Management Weststructure Pty 24 Flinders Lane Pty 176 Adelaide Tce Rockingham Services Apartments Chamlabs Emporium Diploma Capital Securities Allegro Realty Pty Rockingham Waterfront Unit 176 Adelaide Tce Unit Chemlabs Unit 50% Lot 101 Hay Street East Perth 300 Lord St 303 Campbell St Pty 254 West Coast Hwy Subiaco Residential Apartments Lot 101 Hay Street East Perth Unit 300 Lord St Unit The West Coast Unit The Subiaco Residential Apartments Unit Receivers and Managers Appointed Administrators Appointed 50% The Highgate Joint Venture ee capacity 50% ownership Subject to Deed of Indemnity and Guarantee in favour of Swiss Re International SE Source: Australian Securities and Investments Commission database Company Searches database All other information available to the Administrators as at the date of appointment

11 Administrators update Tasks completed to date Preliminary review of financial positon of the Company Held discussions with key stakeholders, including Receivers and Managers, secured creditors and ASIC Commenced investigation into related parties, including related party transactions and directorship, shareholdings and property searches Commenced review of potential Preference Payments received by creditors Held discussions regarding a proposed Deed of Company Arrangement Notified all known creditors and statutory bodies of our appointment Dealt with queries from creditors Requested a Report as to Affairs from the director Prepared for first meeting of creditors Commenced discussions with litigation funders

12 Administrators update - liabilities Total liabilities c.$36.7m Employee entitlements Secured creditors Unsecured trade creditors Retention amounts Intercompany Loans These amounts are based on the Company's records and remain subject to formal adjudication of claims. Priority Creditors (Employees) $ 19 Employees 305,049 Secured Creditors 4 ALLPAAP Registrations Approx Statutory Creditors $ ATO 5,100,021 Unsecured Creditors No of creditors $ Over $100k 43 12,917,099 Over $50k 33 2,382,032 Over $20k 54 1,648,548 Less than $20k ,101 Total ,533,780 Retentions No of creditors $ Retentions outstanding 141 1,271,719 $ m Intercompany Loans $ Diploma Group / Diploma Constr 372,258 Dip Con / Dip Contracting 1,411,026 Total 1,783,284

13 Administrators update - assets Assets Control of the Company's assets is now with the Receivers and Managers Interest in real property Cash at bank Retentions / bonds Plant and equipment Insurance claim There is unlikely to be any material benefit to unsecured creditors from the known assets of the Company Any return to unsecured creditors is dependent upon: Terms of a Deed of Company Arrangement (if accepted by creditors); or Recovery of Antecedent Transactions (if creditors resolve to wind up the Company)

14 Administration Timeline Appointment of Administrators First Creditors' Meeting Winding Up Application Administrators' Investigations and Report to Creditors Second Creditors' Meeting to decide on Company's future 22-Dec Jan Jan-17 by 8-Feb-2017 Option 1 Deed of Company Arrangement Option 2 Liquidation Option 3 Administration Ends

15 Administrators report Pursuant to Section 439A of the Act the Administrators are required to: Convene a second meeting of creditors at which creditors will vote on the future of the Company with regard to the options available to them Report provided to creditors prior to the meeting, which includes details of: the Company's business, property, affairs and financial circumstances; DOCA proposal(s) received, including key terms and estimated return(s) to creditors; Assets available to a liquidator, including estimated return(s) to creditors in liquidation; and Administrators' recommendation to creditors as to which of the options available to them is in their best interests. A resolution put to the vote is decided on the voices unless a poll is demanded. Under a poll a resolution passes or fails on the majority of creditors in number and value

16 Option - DOCA Deed of Company Arrangement ("DOCA") Binding arrangement between a company and its creditors Aims to maximise the chances of the company, or as much as possible of its business, continuing, or to provide a better return for creditors than an immediate winding up of the company, or both Details of any DOCA proposals received will be provided by the Administrators in their report to creditors issued prior to the second meeting The Administrators will provide their recommendation to creditors on any DOCA proposals received

17 Option - DOCA The Di Latte family have indicated there intention to propose a DOCA. Based on our preliminary discussions the proposal would: Encompass creditors from all 3 companies in administration; Provide for a debt to equity swap into Diploma Group Limited, the ASX listed company; Deal with the recapitalisation of the listed entity, including a possible merger with a property focused business, which is unrelated to the current Group; and Provide for a preferred dividend to unsecured creditors from one or more of the Diploma property projects.

18 Option - Liquidation Unlikely to be any material benefit to unsecured creditors from the known assets of the Company at the date of our appointment Fair Entitlements Guarantee for Employees Antecedent transactions (Section 588FE and 588G of the Act) Uncommercial Transactions Unfair Preference Payments Unfair Loans Unreasonable Director-Related Transactions Insolvent Trading Claim NB. Recovery of antecedent transactions are only available to a liquidator (if appointed). The recovery of such amounts are therefore excluded from, and not available in, any DOCA approved by creditors

19 Questions Questions to be addressed the Chairperson State name and the name of the creditor you are representing

20 Committee of creditors Creditors have the opportunity to appoint one or more of their number to form a committee of creditors ("the Committee") The purpose and function of the Committee is to consult with the Administrators about matters relating to the Voluntary Administration, receive and consider reports by the Administrator No nominations to be Committee members have been received Resolution: (Insert Names) be appointed to the Committee of Creditors of Diploma Construction (WA) (Receivers and Managers Appointed) (Administrators Appointed)

21 Closure Thank you for your attendance, no further business declare the meeting closed Second creditors' meeting to be held on or before 8 February 2017.