A construction company became insolvent after a mining multinational was late in meeting its financial obligations.
An ongoing payment dispute with Gina Rinehart’s Roy Hill mine reportedly caused Aerison Group to collapse.
The contractor recently appointed KordaMentha as voluntary administrator. Partners Richard Tucker, John Bumbak and Craig Shepard are tasked with assessing the group’s “financial position and viability”. They urgently plan to carry out either a restructure, recapitalisation or sale.
“Administrators are seeking urgent expressions of interest to acquire the group,” they said in a public statement.
“We are meeting with key stakeholders to ensure their support and ongoing collaboration during the administration to continue trading on a business as usual basis.”
Aerison claims the proponent owes an extra $47.5 million in desalination plant building expenses. The cost of materials and labour significantly jumped since the pandemic began, forcing contractors to either absorb the amount or cease operating.
The group suspended trading at the beginning of May 2023 with an estimated $27.1M in debt finance plus a further $15.8M in trade payables. Mainstream media speculated the six-month dispute concerns the standard of work at the plant.
“Our move to invoke the dispute clauses contained within the contract was a last resort in an attempt to protect the interests of the company and our team, supply chain, contractors and shareholders,” managing director Giuseppe Leone said according to News Limited.
A Roy Hill spokesperson rejected any suggestion the proponent would not settle the outstanding amount, and confirmed with AMR the “dispute is ongoing”.
The remarks came as Rinehart’s Hancock Prospecting entity celebrated 10 years since first securing finance for Roy Hill. The mine reported over $13 billion of profits during the past two years, and expects to continue operating for at least another decade.
“We are very fortunate our partners proceeded to invest in our project. It represented a massive vote of confidence in our hardworking, then small, executive teams,” she Rinehart said according to the media outlet.
“Development and expansion of Roy put us on the map, not just in the Pilbara and across Australia but globally.”
Voluntary administration enquiries can be emailed to aerison@kordamentha.com
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