Queensland boat builder Riviera has been placed in receivership after sinking under the weight of mounting debts and deteriorating economic conditions.
The troubled company, which cut 110 staff in January, and 121 staff in August last year, was placed in the hands of Deloitte receivers Chris Campbell, Vaughan Strawbridge and Richard Hughes late on Friday.
Campbell blamed the company’s collapse on the financial crisis, which has led to a significant drop in sales over the last 12 months.
“The receivers and managers are looking to preserve the long term viability of the business, restructure the business and sell it as a going concern. This process may take some time,” Campbell said in a statement.
“Our first task will be to review the financial position of the company to evaluate the best possible outcome for creditors and other stakeholders with interests in the business.
“Our key focus is to ensure the continued trading and preservation of employee jobs, as well as to derive and implement a restructuring plan. This will allow us to continue to care for the needs of the strong customer base.”
While Campbell says it is business as usual, many of the company’s 600 staff are bracing for the worst, with some tradesmen removing their tools from Riviera’s shipyards just hours before the receivers took control of the business.
It is believed receivers were called in by the Royal Bank of Scotland, which is owed $180 million by Riviera. The company’s total debt is thought to be around $300 million.
Riviera was founded by Bill Barry-Cotter, who sold for $168 million in 2002 in a management buyout lead by the company’s chief executive Wes Moxley and backed by private equity firms Ironbridge Capital and Gresham Private Equity.
Barry-Cotter, who took around $140 million from the deal, subsequently established a rival luxury boat company called Maritimo. He now looms as a possible saviour for Riviera, saying he would be interested in buying the company at a bargain-basement price.
“I would be interested in the property, and I might even be interested in the business,” he told the Gold Coast News.
“But the problem is there are so many skeletons there with the past management.”
Barry-Cotter’s former lieutenant Moxley, who quit last year after having difficulties working with the private equity firms, has also hit out at Riviera’s management.
“These people did not have a feel for the marine industry, for its customers, manufacturing and market strategies,” he told the Gold Coast News.
“When the accountants started to run the business and matters such as people and product became secondary, I knew it was time to leave.”
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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