Restructuring appointments ballooned by more than 300% in 2023–24 compared to 2022–23 and now represent almost 13% of all external administrations.
The Australian Securities and Investments Commission (ASIC) has published its annual insolvency data which shows more than 11,000 companies entered external administration for the first time in 2023-24.
While this is slightly higher than prior peaks in 2011–12 and 2012–13, ASIC says it is proportionately smaller as there are now almost 3.4 million companies in Australia – compared to some 2 million in 2012.
Overall, the number of external administrations grew by 39% in 2023–24 compared to the previous corresponding period.
The top three industries – Construction (27%), Accommodation and Food Services (15%) and Other Services (9.3%) represented over half of total external administrations for 2023–24.
The current ratio of companies entering external administration compared to the number registered (0.33%) is still below 2012-2013 (0.53%) levels.
While the mining sector fared better than the aforementioned markets it too has not been immune, with a number of companies entering into administration so far this year.
Restructuring appointments balloon amid tough times
Late Friday afternoon (26 July), Ben Campbell, Kathryn Evans, and Vaughan Strawbridge of FTI Consulting were appointed administrators of Aeon Metals (ASX:AML). FTI Consulting says the firm is continuing to operate the businesses within the group with a view of assessing possible restructuring options.
On 1 July, Mining.com.au reported that shares in Calidus Resources (ASX:CAI) were suspended from trading after the ASX-listed gold miner collapsed, with receiver KordaMentha coming in to take the reins.
“The receivers and managers are undertaking an urgent assessment of the operations and will shortly be commencing a dual-track recapitalisation and sale process for the group,” KordaMentha explained at the time.
“In this regard, the receivers have held urgent discussions with key stakeholders who have communicated their intention to support the process being undertaken.”
A note from KordaMentha said its appointment followed a decision by the Calidus board to appoint Hayden White and Daniel Woodhouse of FTI Consulting as voluntary administrators on 28 June.
In April, about 150 workers at the Western Australia-based Abra mine were put in limbo after Galena Mining announced administrators KordaMentha were called in to sell or recapitalise parent company Abra Mining. Abra was a joint venture company 60% owned by Galena and 40% owned by CBH Western Australia.
In February, indebted mining company Elmore, which operated the Peko iron ore and gold mine in the Northern Territory town of Tennant Creek was also placed into voluntary administration with KPMG appointed.
According to ASIC, small business restructuring allows eligible companies – those whose liabilities do not exceed $1 million plus other criteria – to retain control of its business while it develops a plan to restructure its affairs. This is done with the assistance of a restructuring practitioner with a view to entering into a restructuring plan with creditors.
Of the 573 companies that entered restructuring after 1 January 2021 and had completed their restructuring plan by 30 June 2024, some 89.4% remain registered, 5.4% have gone into liquidation (one company had entered into a deed of company arrangement) and 5.2% were deregistered as of 30 June 2024.
Write to Adam Orlando at Mining.com.au
Images: Getty Images & ASIC
