CHEMEQ'S world-class drug manufacturing facility at Rockingham, Western Australia, was trouble from the very beginning.
It was supposed to cost $25 million to build, but delays led to significant cost blowouts. The company tried to hide the bad news from shareholders, which led to a record $500,000 fine from the Australian Securities & Investments Commission for breaches to the continuous disclosure law, and it all went downhill from there.
So it's hardly a surprise that CB Richard Ellis, the estate agent tasked with offloading the factory in a bid to recoup some money for the failed company's creditors, is having trouble finding a suitable buyer.
By all accounts the property is quite swish, as you'd expect given that $60 million to $70 million went into creating a modern research and manufacturing facility. But that is also proving a problem.
Already Ferrier Hodgson, the appointed receivers and managers, has determined that the book value of the plant is not likely to be realised at sale.
"Despite offers being received, a final agreement on terms acceptable to the receivers and managers has not been reached," according to administrator Korda Mentha in its latest note to creditors.
It seems that potential buyers have been reluctant to place any value on the specialised aspects of the factory. Perhaps the agent should market it as a renovator's delight.
Meanwhile, the failed company is again facing investigation by ASIC. Korda Mentha has submitted a confidential report on Chemeq's downfall to the watchdog, which will decide whether to take any legal action against the company and its directors.
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