Australian engineering firm RCR Tomlinson has been put into administration just weeks after securing a contract for Auckland’s NZ$3.4 billion City Rail Link.
The company has more than 3400 employees and specialises in large infrastructure projects which also includes the Melbourne Underground Rail Loop upgrade.
It was announced to the Australian stock exchange that administrators are undertaking an assessment of the business and urgently seeking funding from the RCR Group’s financiers.
It came as a surprise to shareholders after having raised AU$100 million in capital in August.
“The administrators will work closely with RCR’s employees, suppliers and customers to quickly stabilise operations and to determine the appropriate strategy for the business.
“A sale process will be commenced immediately,” administrator McGrathNicol Restructuring says.
Administrators have since revealed to creditors that RCR has unpaid debts totalling AU$630 milion.
It would not say how much was recoverable but was preparing to sell the business.
It includes AU$250m owed to about 4000 subcontractors and suppliers.
Administrators have pointed to the company’s failed push in the solar power sector as the reason behind its financial woes.
This includes a AU$57m write-down on two of its Queensland solar projects.
“Our priority is to prepare the business for sale to bring certainty to employees, customers and suppliers.
“The business has been challenged by unprofitable solar contracts within its renewable operations, however, the balance of the business operates across industries which are seeing increasing demand for services,” McGrathNicol partner Jason Preston says.
The business has been challenged by unprofitable solar contracts within its renewable operations, however, the balance of the business operates across industries which are seeing increasing demand for services.
RCR announced on October 11 it was awarded a contract for Auckland’s City Rail Link (CRL).
It has been in a trading halt since November 12.
RCR Auckland-based executive general manager told Stuff.co.nz the firm’s New Zealand branches were separate operating entities.
They were not under administration and it’s “business as normal”.
CRL chief executive Sean Sweeney told RNZ the administration of RCR Tomlinson had “zero impact” on the project.
RCR’s contract, along with its design partner Opus International Consultants, is to work in collaboration with City Rail Link, Auckland Transport and Kiwi Rail on the proposed C7 Rail Project.
This includes the provision of track, track slab, overhead line, signalling, control systems, communications systems, trackside auxiliaries, control room fit-out and building works.
Rail systems are to be installed, tested and commissioned from the existing operational railway to the east of Auckland’s Britomart, through Britomart Station, the new station and tunnels, and to the Western Line.
The NZ$3.4 billion CRL is jointly funded by the Government and Auckland Council and is the largest transport project ever carried out in New Zealand.
It involves a 3.45km twin-tunnel underground rail link up to 42 metres below the city centre transforming Britomart into a two-way through-station for Auckland’s rail network.
