Iconic manufacturer Nylex, the name behind brands such as Esky and Nylex hoses and water products, has been placed in receivership after the company was unable to convince its bankers to renew its lending facilities.
Nylex’s secured creditors, ANZ and Westpac, are owed more than $60 million, although Nylex’s total debt is more than $100 million.
ANZ and Westpac have appointed Colin Nicol, Johan Vorster and Sam Davies from insolvency firm McGrath Nicol as receivers of the group. They will now assume management responsibility for Nylex’s assets and business divisions, which make automotive parts, household goods, water tanks, rubbish bins, fasteners and fabrics.
Nicol says his first task will be to make an assessment of the financial position and prospects for the various parts of the business, although he remains confident that the strength of the company’s brands will assist in a sale or restructuring process.
“Nylex has iconic Australian brands and we believe there is significant value in the Nylex group that we aim to realise via a restructuring and business sales process,” Nicol says.
The receivers say they have already had expressions of interest in parts of the business.
Like many manufacturing groups, Nylex has struggled to combat cheap imports from Asia, rising raw material prices, sliding car sales and the drought.
Various attempts have been made to restructure the group in recent years and pay down debt. Kerry Stokes, majority shareholder and executive chairman of Seven Network, invested heavily in the company via his holding company Australian Capital Equity.
Stokes was Nylex’s biggest shareholder with a 19.4% stake, but it appears he was unwilling to make further investments in the business.
Nylex was founded in the early 1990s by businessman Alan Jackson. He made a series of acquisitions and built the group into a conglomerate with interests across a number of sectors.
But in many cases there were few synergies between these various divisions, and recent leaders of the company have been steadily selling off and closing businesses.
Related article:
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.
Comments