Overview
Olvera Advisors was appointed as Voluntary Administrators to Continental Global Material Handling Pty Ltd, the Australian subsidiary of a US-based parent company that specialised in designing and manufacturing conveyor systems for the coal mining sector.
When the US parent, which was also the primary secured funder of the company, withdrew financial support, Continental Global Material Handling engaged Olvera Advisors as Administrators. Our team implemented a structured wind-down under the Voluntary Administration procedures.
Challenges
- Withdrawal of Funding: The sudden cessation of funding from the US parent company left the Australian operations without liquidity, requiring an immediate stabilisation plan to preserve value.
- Industry and Contractual Exposure: As a key supplier to the coal mining industry, the company faced long-term contractual liabilities and potential claims for damages due to project terminations.
- Complex Stakeholder Management: Managing competing priorities across secured creditors, employees, and customers demanded clear communication and a balanced, transparent process to protect stakeholder confidence.
Turnaround Plan
Our team developed a structured and methodical wind-down strategy through a Deed of Company Arrangement (DOCA). The turnaround plan was executed in three distinct phases:
- Phase 1: Ongoing trading to convert significant work-in-progress and debtor balances into cash.
- Phase 2: Structured wind-down of operations to methodically complete projects and finalise contracts.
- Phase 3: Return of surplus funds to creditors and maximising value for all stakeholders.
Results
The Deed of Company Arrangement (DOCA) process successfully preserved the remaining value of Continental Global Material Handling.
Through controlled trading and disciplined cash management, our team recovered approximately 94% of pre-appointment debtors and completed over $1.5 million in work-in-progress, generating vital liquidity during administration. This enabled the full payment of employee entitlements amounting to around $1.4 million, alongside substantial dividends to unsecured creditors and significant recoveries for secured lenders.
Importantly, the structured wind-down approach minimised potential legal exposure from contract terminations and damage claims. The client maintained operational stability and stakeholder confidence throughout the exit process.
Key Drivers of Success
- Structured, hands-on approach: A methodical, detail-driven administration process that balanced trading activity with cost control.
- Stakeholder collaboration: Active engagement with employees, creditors, and customers to preserve trust and manage expectations.
- Strategic use of the DOCA framework: Leveraging the flexibility of the regime to facilitate an orderly exit rather than a forced liquidation.
Key Takeaway
Olvera’s approach with Continental Global Material Handling demonstrates how a DOCA can be used not just for business sale, but as a structured tool for exit in an industry that may have long tail contingent liabilities.
Our phased approach ensured that the client was able to protect value, manage liabilities, and deliver favourable returns to all stakeholders.
