After failing to attract a willing investor, McAleese’s half-owned high-profile haulage company Heavy Haulage Australia has folded.
Despite undergoing a restructure in an attempt to preserve its business, the decision will lead to the loss of more than 70 Aussie jobs in Brisbane, Toowoomba, Perth and Port Hedland. Its assets will also become available for private sale, which includes 50 prime movers, 120 haulage trailers, 15 cranes and 40 pilot and light commercial vehicles.
The company’s closure comes as result of the fall of iron ore prices combined with pressure on Australia’s mining industry. Although HHA was a well-known heavy haul logistics specialist in the mining and infrastructure sectors, this latest development signals that the industry is still going through hard times.
“While we received a promising level of initial interest from investors, the continuing fall in iron ore prices and the subsequent pressure on the Australian mining industry has seen that interest dissipate,” said Brendan Richards, voluntary administrator of corporate recovery firm Ferrier Hodgson.
The latest new comes just eight months after McAleese spent $3 million for a 50 per cent equity interest in HHA. At the time, McAleese believed the equipment moving specialist represented a great opportunity to enter new areas and customer sectors such as gas and oil.
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The transport and logistics company also agreed to provide $4 million in funding for HHA with an option to purchase the other 50 per cent within the next two to five years. However, McAleese has lost 93 per cent of its value since November 2013.
Earlier this month, two separate bidders bailed out of the sweepstakes to take over HHA. Days later, a deal for a third company interested in buying a good majority of the business that could have saved some jobs also fell through.
Operating since 1999 and specialising in haulage movements between 4000-8000 tonnes for the infrastructure and mining sectors, HHA is also a big sponsor for V8 Supercars and was featured on a Foxtel television series called Megatruckers based on founder Jon Kelly.
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HHA produced $49 million in revenue in 2013-14, and was expected to become even higher at between $55-60 million in 2014-15 after McAleese invested in the business. Now with MCAleese’s market value down to just $28.3 million, it has begun exploring options for legal recourse against HHA.
“This is another sad day for the Australian transport industry, but also further evidence that the decline in the mining industry is still very much continuing,” Richards said. “The outlook for many of the companies with exposure to that decline is troubling to say the least, and further fallout is likely in the near future.”