Misconception
Nightmares3k - Accusations of Insolvent trading have not been levelled at RCR
The figure of $630m is a red herring in thinking about RCR.
The Facts
McGrathNicol last week managed to secure funding to support ongoing trading of the company and said it hoped to find a buyer or buyers by the end of the year, having received interest from more than 180 parties.
"The business has been challenged by unprofitable solar contracts within its renewable operations, however
the balance of the business operates across industries which are seeing increasing demand for services."
I looked up what it means to be in Administration
Administration
is for
companies
that are solvent but are facing issues from their creditors and the act of putting a
company
into
administration
halts all possible legal action against the
company
. The
company can still
actually
continue to trade
as a going concern.
McGrathNicol partner Jason Preston told creditors initial investigations revealed the company's collapse was largely caused by problems with its solar farm developments, which left the business exposed to a number of risks, particularly if there were project delays.This was attributed to the way in which the contracts were structured.
RCR signed engineering procurement and construction contracts, or EPCs, for its solar projects, in which it provided a fixed price for its customers. If the contract took longer to complete, and therefore cost more to deliver, RCR had to absorb the increase.
McGrathNicol said it would like to ask for a three-month extension for the second meeting with creditors to give more time to investigate what went wrong with the business.
Where to from here?
The question remains for me that; While the directors will come under scrutiny, ( as they should)
can the business potential be considered in spite of them.
RCR Shareholders take note. there is now three months to speak out and show support for this business.
respectfully.
Don Quixote
(20min delay)