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D14-191118-VACGVAC03-First meeting presentation-MM 1
VAC Group Holdings Pty Ltd (Administrators Appointed) and associated entities (collectively, the VAC Group)
First Meetings of Creditors28 November 2019
D14-191118-VACGVAC03-First meeting presentation-MM 2
Opening
Meeting formalities
Purpose of meetings
Declaration of Independence, Relevant Relationships and Indemnities (DIRRI)
Role of the Voluntary Administrators
Voluntary Administration timeline
Vac Group
Background
Corporate structure
Creditor claims
Agenda
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Update of Voluntary Administration
Administrators’ actions since appointment
Sale and recapitalisation strategy
Creditors
Employees
Strategy going forward
Questions
Resolutions
Replacement of Voluntary Administrators (if required)
Committee of Inspection
Agenda (cont.)
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1. Vac Group Holdings Pty Ltd
2. Beacos Pty Ltd in its own capacity and as trustee of the Beacos Trust
3. Rebirthed Earth Pty Ltd
4. Soil Transfer Pty Ltd
5. Staking U Asia Pacific Campus Pty Ltd
6. Vac Group Employees Pty Ltd
7. Vac Group Operations Pty Ltd
8. Vac-U-Dig Pty Ltd
9. Vac-U-Digga Pty Ltd in its own capacity and as trustee of Vac-U-Digga Trust
10. Vac-U-Digga R & D Pty Ltd
11. VHS IP Pty Ltd
12. Earth Radar Group Pty Ltd
13. Earth Radar Pty Ltd
14. Cosbea Pty Ltd in its own capacity and as trustee of Cosbea Unit Trust
Meetings being held
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The Administrators applied to the Supreme Court of Queensland for certain orders to allow for the orderly and efficient conduct of the Vac Group Administration.
On 22 November 2019, the Supreme Court of Queensland ordered that:
– The Voluntary Administrators:
> may hold the first meetings of creditors for the Vac Group concurrently; and
> may admit all proofs of debt received by any creditor of the Vac Group for purposes of voting so that creditors are only required to vote once in respect of any resolution put to the meeting.
– Any advances made under the loan facility provided to the Voluntary Administrators and any other liabilities incurred or accrued under or in support of the loan facility – including fees, guarantees, indemnities, security, borrowing costs and interest – are liabilities incurred by the Voluntary Administrators in the performance and exercise of their functions and powers as voluntary administrators of the Vac Group (Liabilities);
– if the indemnity in respect of the Liabilities is insufficient to meet such liabilities, the Voluntary Administrators will not be personally liable to repay the liabilities to the extent of insufficiency.
A copy of the Order is tabled at this meeting.
A copy of the Order will be sent to creditors following this meeting by post or email.
Order of the Supreme Court of Queensland
D14-191118-VACGVAC03-First meeting presentation-MM 6
1. Vac Group Holdings Pty Ltd
2. Beacos Pty Ltd in its own capacity and as trustee of the Beacos Trust
3. Rebirthed Earth Pty Ltd
4. Soil Transfer Pty Ltd
5. Staking U Asia Pacific Campus Pty Ltd
6. Vac Group Employees Pty Ltd
7. Vac Group Operations Pty Ltd
8. Vac-U-Dig Pty Ltd
9. Vac-U-Digga Pty Ltd in its own capacity and as trustee of Vac-U-Digga Trust
10. Vac-U-Digga R & D Pty Ltd
11. VHS IP Pty Ltd
12. Earth Radar Group Pty Ltd
13. Earth Radar Pty Ltd
14. Cosbea Pty Ltd in its own capacity and as trustee of Cosbea Unit Trust
Meetings being held concurrently
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Quorum: Insolvency Practice Rules 75-105
Attendance register
Voting (on the voices and using voting slips)
Time and place convenient: Insolvency Practice Rules 75-30
Proofs of debt and proxies
Meeting formalities
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First meeting of creditors
Convened under Section 436E of the Corporations Act to:
– determine whether to appoint a Committee of Inspection and, if so, who are to be the Committee members; and
– consider the removal of the Administrators and appoint an alternative Administrator who has consented to act
These meetings have no authority to consider any other business
Second meeting of creditors
To be convened on or around 19 December 2019
Creditors will vote on the future course of action for Vac Group
Purpose of meetings
D14-191118-VACGVAC03-First meeting presentation-MM 9
DIRRI
DIRRI dated 21 November 2018 – a copy was distributed with the initial information to creditors
DIRRI is tabled and is available for inspection at this meeting
Our assessment identified no real or potential risks to our independence
Remuneration
Schedule of rates provided with meeting information
Comprehensive remuneration report will be prepared prior to seeking approval of fees
Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) and remuneration
D14-191118-VACGVAC03-First meeting presentation-MM 10
Voluntary Administrators:
Appointed by directors of Vac Group and represent the interests of all stakeholders
The directors’ powers are immediately suspended and the Voluntary Administrators are in control of the assets
The Administrators are responsible for the ongoing trading of the business
Our responsibilities include:
Holding meetings of creditors;
Investigating the reasons for failure of the business;
Preparing a comprehensive report to creditors; and
Making recommendations to the creditors about the future of the companies.
Role of the Voluntary Administrators
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Voluntary Administration timeline
Appointment Within 25 business days
21 November 2019
Written notice of first meetings e-mailed or mailed to creditors and employees
28 November 2019
1st meetings of creditors held
Purpose:
(i) Consider the replacement of the VA
(ii) Consider the appointment of a Committee of Inspection
12 December 2019
Written notice of second meetings mailed to creditors and employees
19 December 2019 (approx.)
2nd meetings of creditors held
Options:
- DOCA
- Liquidation
- Return to directors
18 November 2019
Administrators take control of company and its assets
12 December 2019
Administrators Report issued with recommendations
Within 20 business daysWithin 8 business days
ADMI
NIST
RATI
ON
Today’s meetings
D14-191118-VACGVAC03-First meeting presentation-MM 13
The Vac Group commenced in 2000
The services provided by Vac Group include excavation of materials using non-destructive vacuum hydro-excavation services, associated waste recovery, transportation, treatment, disposal and/or recycling services. Vacuum excavation services include:
– Excavation of existing pits;
– Excavation of new ground for pits;
– Trenching and potholing for services;
– Pump out of waste materials; and
– Waste transport and disposal.
Vac Group has also developed a range of technologies to allow Vac Group to locate and map underground services, such as water, telephone, fibre-optic and other services, utilising electro-magnetic induction and high resolution ground penetrating radar.
Vac Group has a range of mobile plant and equipment in operation throughout Australia. This includes:
– Truck-mounted vacuum excavation units;
– Hook lift vacuum excavation unit and skip bin units;
– Tipper trucks and trailers;
– Various light vehicles;
– Road profile (surveying units); and
– Other specialised equipment
Background
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Corporate structure
Source: Corporate structure provided by Management and ASIC company searches
Vac-U-Digga Pty Ltd (atf)
Rebirthed Earth Pty Ltd
Vac-U-DiggaR&D Pty Ltd
Staking U Pacific Asia Campus Pty
Ltd
VAC Group Employees Pty
Ltd
Vac-U-Digga Trust
Beacos Trust
VAC Group Operations Pty
Ltd
Beacos Pty Ltd(atf)
Earth Radar Group Pty Ltd
100% 47%
100% in all entities
New Zealand OperationsEarth Radar
Related party
Jaya Management Pty Ltd (6%)B Reeves Family Pty Ltd (35%)John Raymond Reeves (12%)
53%
VAC Group Holdings Pty Ltd
100%
Australian Operations (referred to as Vac Ops)
Beacos NZ Limited
Vac-U-Digga NZ Limited
Soil Transfer Pty Ltd
Cosbea Pty Ltd `
VacTel NZ Limited
Cosbea Unit Trust
Earth Radar Pty Ltd
NOT SUBJECT TO APPOINTMENT
VHS IP Pty Ltd
Vac-U-Dig Pty Ltd
Neil Costello (33.33%)Benjamin Costello (33.33%)
Sofia Salvatore (33.33%)Related party
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Creditors are entitled to lodge claims with the Administrators for monies owed
It is too early to form conclusive views on the potential return to unsecured creditors
The order in which different classes of creditors are paid is determined by the Corporations Act 2001
Generally, the order of priority is as follows:
– Employees (priority from certain categories of assets)
– Secured creditors
– Unsecured creditors
Creditor claims
Category Estimated number Estimated value ($’000)
Employees 245 4,417
Secured & PPSR creditors 56 22,342
Unsecured creditors 276 4,248
Total 577 31,007
D14-191118-VACGVAC03-First meeting presentation-MM 17
Worked to stabilise the operations
Briefed employees across all major locations
Paid wages to employees
Opened accounts with key suppliers
Commenced a sale and recapitalisation campaign
Engaged in discussions with secured creditors for continued support
Arranged for new working capital facility
Engaged valuers to prepare valuations of:
– Plant and equipment
– Real properties
Commenced investigations into Vac Group’s affairs
Assessed Workplace Health and Safety
Prepared a trading forecast for the voluntary administration period
Attended to statutory notification obligations
Convened for the first meetings of creditors
Key actions taken since appointment
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Administrators are seeking expressions of interest in Vac Group
Expressions may include recapitalisation or acquisition of Vac Group
Advertisements featured in national newspapers on 19 November 2019
Non-binding expressions of interest close on 2 December 2019
A number of parties have expressed initial interest
A range of information has been made available to interested parties
Further information will be provided in the Report to Creditors
Sale strategy
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The Vac Group has approximately 262 employees
The Administrators are responsible for all wages and entitlements during administration
Pre-administration Employee entitlements:
– Employees are entitled to register claims
– Claims are afforded a priority under s556 of the Corporations Act
Employees
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The Voluntary Administrators will:
– continue to assess ongoing operations;
– continue the sale and recapitalisation process;
– complete our investigations into Vac Group’s affairs;
– prepare and issue the Report to Creditors by 12 December 2019 (including recommendation on Vac Group’s future); and
– convene a second meeting of creditors for 19 December 2019.
Next steps
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Section 436E(4) of the Corporations Act 2001 allows creditors to appoint alternative Voluntary Administrators if they so choose
Prior to the meetings today, I have not been made aware of any alternative Voluntary Administrators having been nominated or consenting to act
If there are no alternative Voluntary Administrators nominated to replace Rob Kirman and myself, there will be no resolution put to creditors on this matter
Replacement of the Voluntary Administrators
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Role is to represent creditors
Has capacity to grant the Voluntary Administrators permission to undertake certain actions
Creditors may determine whether there is to be a committee of inspection
The purpose and powers of a committee of inspection are to:
– advise and assist the Voluntary Administrators;
– give directions to the Voluntary Administrators; and
– monitor the conduct of the Voluntary Administration.
Pursuant to the Order of the Supreme Court of Queensland dated 22 November 2019, if a Committee of Inspection is formed:
– a single Committee of Inspection will represent creditors of all entities within Vac Group; and
– will be limited to a maximum of 10 members.
Committee of Inspection
The Administrators do not recommend a Committee of Inspection be formed for the Vac Group of Companies for reasons disclosed in our initial notification to creditors
dated 21 November 2019