After coming close to the brink, McAleese may survive, if a bail out consortium gets up. Mark Rowsthorn, McAleese CEO, is reported to be developing a rescue plan for the ailing company, which has been hit by a number of unfortunate events in recent years.
The slow down in the resources industry has hit many quite hard and McAleese, with its involvement in heavy haulage and also fuel distribution was already on the back foot when a number of other incidents put further pressure on finances.
The company’s fuel Distribution arm, IES (formerly Cootes), was involved in the dramatic tanker crash in Mona Vale, in which two people died. The aftershock of the accident saw the fuel fleet grounded by the authorities over maintenance issues and then the loss of some contracts, as a result, put further pressure on the business.
McAleese then took a stake in Jon Kelly’s ailing Heavy Haulage Australia operation and saw losses mount before its inevitable collapse. The collapse of the iron ore price led to cutbacks in production for Atlas Iron, one of McAleese’s biggest customers, another hit to cashflow.
When the McAleese operation was floated on the stock market in 2013, its shares were valued at $1.50. Before trading was suspended, the price had fallen to 5.8 cents. This drop has seen Rowsthorn’s 31 per cent share in the company fall from its initial value of $138 million to not very much at all.
Any rescue package may well see Rowsthorn, and his backers, putting even more money into the business, in an effort to shore up finances. Any attempt to refinance the company as a listed stock is looking unlikely to get up. The alternative could see Rowsthorn and a number of others taking the operation back into the private ownership realm.
At the same time, Rowsthorn’s previous company, Asciano, looks to be on the verge of a successful sale of the operation to a complex consortium, involving Qube, Brookfield and a number of other players. The group plan to offer $9.28 per share, up from the previous competing bids.
The final splitting up of the Asciano divisions among the bidders is yet to be clarified, but the ACCC will be keeping a keen eye on the outcome.