The managing director of transport company 1st Fleet, which collapsed on Wednesday, has slammed the actions of the company’s funder, its administrator de Vries Tayeh and its finance companies.
Stephen Brown, managing director of 1st Fleet, was very upset at some points when describing the company’s collapse to SmartCompany this morning.
The transport company was placed into administration on Anzac Day but the 1,200 workers (around 600 of which were employees) were locked out on Wednesday and told their jobs were terminated.
A distraught Brown says he used a French company called Coface Australia to help make its payments, rather than a bank overdraft. In return for payments, Coface took security over the firm’s assets.
Brown says the collapse is “a friggin’ disaster” and was vitriolic in his assessment of “those dickheads”, when referring to funders Coface.
“The funder would not continue on, there was no other logical reason, he had reduced his exposure from $7.5 million to $5.5 million in the last week and decided to stop trading with a ledger of $10.5 million, so there was no reason to stop.
“These gooses want to go home to France and wanted the money back in France and didn’t care about the 600 jobs. It’s just disgraceful.”
Brown says after the transport company initially entered administration he had been confident it could survive with funding in place and was subsequently shocked to discover Coface had pulled the funding.
“How did we know they would pull the pin in the second week, they knew what the program was,” says Brown.
Brown also says 1st Fleet had been under increasing pressure from margins being squeezed, saying finance companies had been especially culpable in the company’s demise.
“It’s private transport companies like us, not the big companies, it’s the little boys [that finance companies target].
“They consider you a risk so they give you a high risk rate and we were paying our trucks off at twice the pace we should have been with interest rates of 12% to 15%.”
Brown says all of 1st Fleet’s financiers were to blame, with Mercedes Benz being the biggest. The 1st Fleet head is also scathing of the role administrators de Vries Tayeh played, describing the firm as “idiots”.
“All my people are fabulous people who work for nothing for a couple of weeks to keep you going, but these people are idiots, they have no idea,” says Brown.
“We just had a driver arrive from WA and the poor bastard was in transit so he didn’t know we closed the doors yesterday, so he had to turn around and drive back.”
Brown says he has “no idea” what was going to happen to 1st Fleet’s employees but it was something he was working hard on.
“I am the only one here now.”
Administrators de Vries Tayeh hit back at Brown’s allegations with administrator Antony de Vries telling SmartCompany “some of the things he says are not factual.”
“It is a distortion of the facts I would think. That’s not the reason Coface took the position they took,” says de Vries.
De Vries says in August last year Coface advised all of its clients that it was quitting their business in Australia and they gave them all “ample opportunity” to rearrange their finances.
“1st Fleet was the only customer who was unable or unwilling to do so,” says de Vries.
De Vries says Coface advised 1st Fleet that its facility expired at the end of April and it would not be renewed as Coface was shutting up shop in Australia and at the end of April “Coface had nowhere to go and was unable to continue the facility”.
“During that week when we stepped in as administrators, the director made some undertakings to Coface that he would be able to do certain things, so Coface advanced a line of funding to us as administrators on a week-by-week basis,” says de Vries.
He says this was a temporary measure afforded to the company while de Vries Tayeh fulfilled its role as independent administrators of the company.
De Vries says he does not want to respond to Brown’s comments on Coface, 1st Fleet’s Finance Companies and de Vries Tayeh.
“Obviously I disagree, he is entitled to his own opinion,” says de Vries.
“I don’t see how being drawn into a slanging match of insults is going to save the business.”
De Vries Tayeh announced this morning that it had entered into agreements to sell two of 1st Fleet’s divisions.
The administrator has sold the C-Store and Container divisions with operations recommenced immediately and “business as usual” for the 80-strong workforce.
Negotiations are continuing for the sale of two remaining divisions, while arrangements were made for undelivered goods to be returned to customers.
The administrator said all drivers had returned to their home states.
SmartCompany contacted Coface for comment, however, it did not respond prior to publication.
Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times’ website and worked for The Sunday Times in London.
Comments