Reduced debt burden of contractor labour hire company by 84% & saved 200 staff from lay-off

CONTRACTOR LABOUR HIRE – NATIONAL

$1.4 million

OWED TO CREDITORS

100%

EMPLOYEES RETAINED

84%

DEBT REDUCED BY

YES

CONTINUED TO TRADE

The financial situation:

This contractor labour hire company working with Queensland, New South Wales and Victoria rail lines came to us with an overall debt of $1.4 million, just under half of which was owed to the ATO. This company had more than 200 staff and $1 million in unencumbered assets. They had just received a winding up application.

The solution which reduced their debt by 84% and retained their 200 staff members:

First and foremost AVA Advisory arranged an adjournment to push back the client’s hearing date. This gave them eight extra weeks to prepare and gave us enough time to obtain financing through a lease/buy-back arrangement using the assets in the company. The company was then placed into voluntary administration and the DOCA was signed. The funds obtained from the finance arrangement were used to pay out creditors at a dividend of 16c to the dollar, a reduction in debt for the company of 84% – or a much more manageable $224,000. The terms laid out in the DOCA were successful and the company managed to continue trading, but more importantly, their 200 staff members remained employed. We also implemented a restructure of the company to refocus the business on their core activities and enabled leaner and less complicated operations for smoother and more efficient financial dealings in the future. But the best part of this story came almost halfway through our six months of working with the company – during the restructure, we discovered that almost 60% of the company’s staff were Indigenous Australians, which meant they had the option to obtain government grants totalling almost $600,000 to better train their staff and grow their business. A fabulous story and a truly happy outcome for the company and their staff. It’s small details like this that make working with debt experts a worthwhile experience.

Don’t Take Our Word For It…

We understand that when your business is in financial distress, you need advisors you can truly rely on. While we are confident in our ability to deliver results, we think these words from past clients speak volumes:

Jason M

AVA advisory met us in relation to a recent legal matter. They were able to explain to us what our options were and how we could achieve them. They kept our business alive and were able to reduce our debts from over $1,000,000 to under $200,000.

Jill H

“Andrew, (who I call my guardian Andrew) constantly reassured me and I felt we were in safe hands. He and his staff never sugar coated anything, told me the best and worst outcomes and was completely honest. Thanks to the team, we are part of the 30% of businesses that come out of an Administration with a business.”

John H

In a nutshell, AVA Advisory dragged us out of the mire and enabled us to continue to trade. AVA managed to reduce our debt which allowed us to save the business, save our employees jobs and entitlements and enabled us to trade on into a stronger position.

Let’s work together to achieve these kinds of positive outcomes for your business. Get in touch today to book your free consultation.