Perth-based engineering firm RCR Tomlinson will be broken up and sold after its board opted to appoint administrators on Thursday.
The firm, which operates in the rail space as well as in resources, utilities and other infrastructure, entered a trading halt on November 12, but was unable to avoid administration, which the board announced on November 22.
“Further to the company’s trading halt and announcement on November 12, 2018, the company has not been able to secure additional funding,” RCR said.
“As a result, the boards of the group companies met and resolved to appoint administrators.”
Administrators said a sale process would begin immediately.
As recently as October, RCR Tomlinson was selected for a major contract to deliver underground rail infrastructure for Auckland’s City Rail Link, in a joint venture with Opus International Consultants.
The parties are in the process of negotiating with the NZ Government, Auckland Transport and KiwiRail on a final deal for the work, due in March 2019.
In January, RCR was selected to deliver $70 million in upgrades to the Melbourne Underground Rail Loop.
RCR was also part of the Novo Rail Alliance which delivered the recent Wynyard Station upgrade.
RCR recently conducted an equity raising, with investors pitching in $100 million in August.
Simon Mawhinney, managing director of RCR’s third-largest shareholder Allan Gray, couldn’t believe the news.
“We’ve never seen a turnaround like this,” Mawhinney was quoted by the ABC. “After the $100 million they raised, they allegedly had $140 million of net cash and a seemingly bullet-proof balance sheet … It’s very hard to say what’s happened, we have no idea.”
The RCR Tomlinson board appointed McGrathNicol as administrators.
“The administrators are undertaking an assessment of the business and urgently seeking funding from the RCR Group’s financiers,” McGrathNicol said on November 22.
“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.”