The Cairns Post - Meetings held to crunch CEC figures

13 May 2011

The Cairns Post

Meetings held to crunch CEC figures

THE first meeting of creditors owed an estimated $46 million by the CEC Group is being held in Cairns next week.

Administrators Terry van der Velde and David Stimpson of SV Partners have called the meeting for 11am on Wednesday at Brothers Leagues Club.

The meeting will discuss the level of debt and the administration process involving CEC Constructions, the group’s main trading business.

Group debts, according to a financial statement lodged with the Australian Securities Exchange earlier this week, total $135 million, including about $63.5 million to the Commonwealth Bank, bank overdrafts of $19.35 million and $7 million to employees.

The company has also recorded a $70 million loss for the half year to December 31, 2010

The entire group of 21 companies is now in administration and in receivership.

In a letter to creditors, the administrators say the meeting will consider electing a committee of creditors and whether an alternative administrator is appointed.

“The meeting will also allow you to consider the affairs of the company and the results of the administrators’ investigations to date,” the letter said.

A second meeting is scheduled for June 10, if not before, when a second report will be presented and the future of CEC Constructions is discussed.

A week before the second meeting a detailed report about the company’s business, property, affairs and financial circumstances will be provided.

The administrators will also recommend whether to execute a Deed of Company Arrangement which may allow the business to continue, to continue the administration process or to wind up the company.

At both meetings, creditors will be entitled to vote on the options put to them.

The receivers, Chris Honey and Keith Crawford of McGrathNicol, were unable to provide any details of the receivership process yesterday.

On Friday last week, CEC Group chief executive Roy Lavis put CEC Constructions into voluntary administration with a plan for him and the staff to buy back the company, negotiate with creditors and re-start its operations.

But after CEC was unable to pay back the debt of $63.5 million to the Commonwealth Bank on Tuesday the bank called in the receivers.

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