Contractor Indigenous Construction Resource Group has suffered two setbacks, with its half-owned joint venture ICRG North expected to go into liquidation owing creditors about $4 million.
Contractor Indigenous Construction Resource Group has suffered two setbacks, with its half-owned joint venture ICRG North expected to go into liquidation owing creditors about $4 million.
Perth-based ICRG has also been forced to admit that, contrary to its own statement, it did not buy consulting business Nana Australia.
The failure of ICRG North, which worked primarily on infrastructure projects for the NT government, could come at a substantial cost to ICRG.
The directors of Darwin-based ICRG North placed the business into voluntary administration on February 22.
Stuart Reid, a partner at Darwin accounting firm Meertens, told Business News a meeting of creditors is scheduled to happen tomorrow.
Mr Reid said the most likely outcome was that ICRG North would be placed into liquidation, as a restructuring via a deed of company arrangement had not been proposed.
The business owes a total of $4 million to about 50 creditors.
This includes $2.5 million owed to non-related parties and $1.5 million to related parties, including ICRG, which is led by chief executive Shane Cable and chairman Raymond Drage.
ICRG said today it was the largest creditor of ICRG North due to unpaid administrative support fees, which consisted of areas such as accounting services, estimating and IT support, plus unpaid equipment hire and unpaid logistic services.
The Darwin business was 50 per cent owned by ICRG, which also provided funding, business, technical and training support.
The other shareholder was private company Indigenous Civil and Construction Pty Ltd.
The directors of that business are Russell Jeffrey and Dean Rioli, and they were the only directors of ICRG North at the time it went into administration.
ICRG previously had representatives on ICRG North’s board but none recently.
Mr Reid said ICRG North’s only asset was an amount between $330,00 and $420,000 owed on one contract, believed to be with the NT government.
He said it was too early to estimate a return to creditors.
Business News has also been told that some contractors who believed they were doing business with ICRG have subsequently been told they were in business with ICRG North.
These matters could involve legal action to determine the actual counterparty and to prove debts.
The collapse of ICRG North follows the winding up of several other joint ventures that had been established by ICRG.
Its sole remaining joint venture is Guma ICRG, which has always been its main operating arm.
Meanwhile, ICRG has issued a statement correcting its February 19 announcement about Nana Australia, the local offshoot of a giant Alaskan native corporation.
ICRG said in February it had acquired Nana Australia and successfully merged the two companies’ operations.
However, Nana Australia ceased trading in late 2016 and is currently progressing through a solvent liquidation process after its parent company decided to cease operations in Australia.
PPB Advisory was appointed liquidator on January 9.
ICRG’s statement today conceded it simply negotiated for former Nana Australia CEO Rod Gonzales to join ICRG as general manager commercial, following Nana ceasing operations in Australia.
