Yet another company involved in the insulation industry has collapsed, with Intelligent Solar announcing late last week that it had appointed administrators after having sustained heavy losses due to ramping up production for the Government’s insulation program.
The collapse comes just weeks after three major insulation manufacturing firms said they would be seeking $50 million in compensation from the Government after the scheme was cancelled two years early.
The appointment of an administrator also comes just weeks after Intelligent Solar announced to the market it received a notice of default from a trustee acting on behalf of convertible note holders.
Administrator Manfred Holzman of Holzman Associates says the company is best known in the market as the insulation and air conditioning provider Cool or Cosy, which then later changed its name to Intelligent Solar.
As well as making and installing insulation, Intelligent Solar also owns solar hot water technology.
In a statement, Intelligent Solar said the company had been manufacturing and installing insulation for over 25 years when the Government’s program prompted a ramp-up in production.
“ISL suffered substantial losses and write-downs as a result of the Federal Government’s policy change,” the company says.
“With the market for its insulation products dramatically reduced, ISL entered into discussions with various companies in relation to possible merger opportunities.”
However, these discussions stopped in 2010 and ISL went ahead with a share purchase plan, but only raised a minimal amount of money. Short-term funding arrangements were also exhausted, leading to the appointment of administrators.
Cool or Cosy offices were contacted this morning but it appears the line has been disconnected.
Financial records show Intelligent Solar recorded a loss of $2.4 million in the half to December 31, due to a number of factors including the insulation manufacturing problems, unseasonal cool weather conditions, write-downs and one-off cost savings initiatives.
Holzman says the appointment occurred late last week, so he hasn’t had time to start a proper investigation. However, he says the company will be seeking expressions of interest for the solar division of the company.
“We will be seeking expressions of interest for the technology, the solar hot water technology. But I spoke with the directors late last week and have requested more information which should come through later today.”
“I can say there are very few creditors.”
The collapse comes as more insulation providers are calling on the Government to provide compensation for manufacturers. Several argue that because the market has now been flooded with unused products, prices are falling resulting in unsustainable prices.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
