Forge loses projects, employees stood down 1300 employees on power stations and mining projects in Western Australia and Queensland were retrenched today after the principals of the construction jobs exercised contractual rights they claimed on the projects. Mr Mark Mentha of KordaMentha Restructuring said he hoped some of the employees may be able to get work with the new contractors. Forge employees would receive their entitlements from the sale of Forge assets and the Federal Government scheme that guaranteed basic entitlements. He said: “There is no money to pay employees and no work to perform. We are working closely with the administrators Ferrier Hodgson to do whatever we can to help the employees at this dreadful time for them and their families. We will be bringing the employees back to their home town and helping them apply for their entitlements.” KordaMentha Restructuring was appointed Receivers and Managers of the ASX-listed engineering, procurement and construction company on Tuesday, following the Company’s decision to appoint Ferrier Hodgson as Voluntary Administrators. Mr Mentha emphasised that Forge’s international businesses in South Africa, Asia and the US would operate business as usual pending a sale of those businesses. These operations come under the Taggart and Webb Groups. The Australian operations had to be assessed on a project-by-project basis. “Today’s moves by some of the owners of the projects forced our hand because there is no cash to carry employees,” he said. Employees were notified of the redundancies at meetings this afternoon. The appointment of Administrators and Receivers follows the company reporting significant cost over-runs and profit downgrades in power construction contracts. Mr Mentha said against a backdrop of material movements in cash flow and EBITDA projections, the Company’s financiers did everything possible to give the Company time to find a solution to repair its balance sheet. Forge previously employed 1753 staff in Australia, mostly in the construction division, with a further 814 overseas. All employees and creditors should contact the voluntary administrator at [email protected] or (08) 9214 1485 for further information.
FGE Price at posting:
91.5¢ Sentiment: None Disclosure: Not Held
