The receivers of the Perth-based Forge Group say 1,300 workers have lost their jobs as part of a restructure. The mining services contractor went into administration yesterday after its financial backers withdrew support. Forge employs more than 1,750 people in Australia and New Zealand, mainly in construction. About 400 employees are being retained at this stage. Receivers KordaMentha says the retrenched workers should receive their entitlements. The international operations are being treated separately in the restructuring process. Forge has construction and engineering contracts with big miners and energy companies including Rio Tinto, Fortescue Metals, BHP Billiton and Chevron in Australia and overseas. It is building the Cape Lambert and West Angelas power stations for Rio Tinto Iron Ore in Western Australia's Pilbara region, and the Diamantina Power Station in Queensland. Forge has run into financial problems as a result of cost blowouts and delays in its projects. In a statement, KordaMentha said the retrenchments occurred after the principals of the construction jobs exercised contractual rights they claimed on the projects. It was hoped some of the employees may be able to get work with the new contractors. Forge's international businesses in South Africa, Asia and the US would operate as usual pending a sale, but the Australian operations had to be assessed on a project-by-project basis. Yesterday, Forge's financial backers, including the ANZ group, withdrew its support. ANZ has told the ABC that it worked hard in recent months to support Forge and assist its management. It said the decision to appoint an administrator was disappointing for everyone involved. Last month, Forge appointed Euroz Securities to deal with approaches from third parties. Some groups which were reported to be interested ruled it out when contacted by the ABC.The firm had warned it expected to post a loss of up to $25 million for this financial year.
FGE Price at posting:
91.5¢ Sentiment: None Disclosure: Not Held
