NEWS - Mustang back in voluntary administration
50 jobs go
A breakdown of discussions with a potential partner is among the reasons for last week’s decision to place luxury boatbuilder Mustang Marine back into voluntary administration for the second time in as many years.
Chris Heaton, Mustang’s CEO, confirmed that rival boatbuilder Riviera was among the companies that Mustang had held discussions with in the past two months. Riviera CEO John Anderson, however, had talked down merger talks earlier this month.
Voluntary administrators took control of Mustang last Friday, with 50 jobs lost in consequence for the Gold Coast builder.
Mustang's South African owner, Standard Bank Asia Limited, has withdrawn financial support for the company. And one of the triggers for the move is the failed merger talks with rival Riviera. Heaton reportedly confirmed his company had been negotiating with two potential partners in the past two months.
Standard Bank Asia Limited, an investment arm of the South African Standard Bank based in Hong Kong, saved Mustang in early 2008 after 12 weeks of receivership. At the time, it saw the boatbuilder as an opportunity to get involved with a business that had huge growth potential in Asia.
Despite robust growth in 2009, Mustang began looking for partners two months ago following poor sales in the first quarter of this year.
Heaton also said expenditure on developing new models had taken its toll in the past year, along with a fire that hit a major supplier and interrupted the timing of new-product releases.
Mustang said the administration period would be used to seek a new financial backer and that all boats on order would continue to be built and delivered. The ultimate future of the company, however, again rests with the mood of creditors, who are understood to be owed less than $1 million. The first creditors' meeting will be held within 10 days.
Some creditors are said to be angered by the company's collapse, a little more than two years after it was placed in receivership by former financier, National Australia Bank, in late 2007. The Gold Coast Bulletin reported that creditors could possibly seek liquidation rather than approve a deed of company arrangement
Heaton though said Mustang still supports 46 staff and remained a viable business. "There definitely still is a future for Mustang," he said.
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