Lazard-backed Hastie Group enters administration
Hastie Group, the Australian engineering company backed by Lazard, has entered into voluntary administration after recapitalization talks failed. It comes after recapitalization talks failed due to “accounting irregularities” led to a profits charge of A$20 million ($19.7 million) and the subsequent resignation of two non-executive directors.
The company also announced that receivers and managers have been appointed to its Spectrum Fire & Safety, Hastie Services, Gordon Brothers Industries and Austral Refrigeration business units.
If the administrators fail to reach an agreement with creditors, Hastie's will be wound up. According to Australian media, Hastie's principal creditors - Australia & New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac - could face writedowns of almost A$250 million.
Lazard invested in the company last June as part of an earlier recapitalization effort, taking a stake of up to 25% for A$170 million. Hastie's raised A$110 million through a 2.85-for-one renounceable entitlement offer, A$42.8 million through a conditional institutional placement, A$10 million via a share purchase plan and A$7.2 million from a placement to Lazard's private equity unit.
Hastie's employs 7,000 people and provides refrigeration and air conditioning services to the building industry. The company posted a loss of A$149 million in the second half of 2011 and its share price slipped from A$9 last year to A$0.16 in April, when trading was suspended. Its business outlook is said to be bleak due to weak housing markets in Australasia, Europe and the Middle East.
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