A national steel distribution company with $110 million in annual revenue has collapsed into receivership and been put up for sale in further evidence Australia’s construction sector remains under pressure.
7Steel Distribution, which has its headquarters in the New South Wales town of Mt Druitt, has 11 sites located around Australia, including facilities in NSW, Victoria, Queensland, Northern Territory and Western Australia.
Receivers Peter Marsden and David Kerr from accounting firm RSM Bird Cameron and administrators Paul Weston and David Young from Pitcher Partners were appointed on March 1.
Marsden and Kerr have now put the business on the sale block. The company had revenue of $110 million in 2008-09. The current value of stock on hand is put at $25 million.
The company is continuing to trade.
7Steel Distribution is part of the Consolidated Steel Group, a diversified steel operation which also includes 7Steel Building Products, Hong Kong-based steel trading company Pacific Industrial Group, and Sydney-based steel trader Capital Steel.
It is not yet known what affect the collapse of 7Steel has had on the wider group, although ASIC documents indicate the other companies in the group are not facing insolvency action.
Administrator Paul Weston told SmartCompany this morning that from his perspective 7Steel was “quite separate” from the other parts of the group.
“My only interest is a administrator of 7Steel Distribution,” he says.
“The receivers are in control of the assets and we will be working with them to try and maximise the position for all creditors.”
Weston says it is too early to comment on the reasons for the collapse of the company.
Representatives from Consolidated Steel did not respond to a request for comment prior to publication.
In June 2008, 7Steel acquired the distribution business of listed metal recycler Sims Group for an undisclosed price.
Offers for the business are due by March 12 and the first creditors meeting will be held on March 10.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
