A Noble & Son Ltd (Nobles) went into voluntary administration on June 15 when its directors decided the company was unable to repay its debts and restructuring was urgently needed.
The Kilburn-based company provides lifting and rigging equipment, technical services and engineering design for a range of heavy industries including mining, oil and gas, construction, shipping, manufacturing and defense.
It has 11 locations across Australia.
James McPherson and Austin Taylor of Adelaide-based Meertens Chartered Accountants have been appointed as directors and say the company is insolvent.
Nobles chairman Ian Stirling addressed shareholders at a meeting last week asking them to transfer their shares and detailing plans for a bailout proposed by E&A Limited – an investment company with 10 wholly owned subsidiaries in the mining, resources, defence, water, energy and financial services sectors.
The Keswick-based E&A companies employ over 1400 people and have historically retained trading names through subsidiaries.
In a letter to shareholders dated June 28, Stirling said the company deed agreement (DOCA) suggested by E&A was based on getting a better return for creditors than winding up the company and would be presented at the next meeting of creditors on July 20.
“It is a key term of the proposal that EAL acquire all the shares and therefore the business of Nobles,” Stirling wrote in the letter seen by InDaily.
“We are fortunate to have the support of EAL who have demonstrated their commitment by funding the mid-June payroll and their proposal to ensure the continuity of employment and the survival of the Nobles brand in the future. .
“The DOCA does not provide for a return for shareholders, but neither does the alternative, being liquidation.”
The directors of Nobles have asked shareholders to accept the transfer of their shares by July 19, before the next meeting of creditors.
“The DOCA can only be completed if your shares are transferred as required by E&A Limited’s proposal,” McPherson wrote in a letter to shareholders after last week’s meeting.
“Furthermore, if the shares are not transferred as required by the terms of E&A Limited’s proposal, then the company would enter into liquidation on resolution passed by creditors or by order of the court.”
A Noble & Son Limited was founded in Adelaide in 1911 and has over 100 employees.
With annual revenues of around $45 million, the company slid down the rankings in InDaily’s South Australian Business Index in recent years, rising from 70 in 2019 to 79 in 2020 and 93 in 2021.
In his letter to shareholders, McPherson said the DOCA would allow the company’s “good name and tradition” to continue through insolvency under new ownership.
“Under this DOCA proposal, the employment of approximately 100 employees will be saved and the company will continue to provide its services, engineering and production functions to its long-standing customer base,” it said. he writes.
“DOCA is expected to allow the rights and severance of employees who had to be released from the company to be paid in full and also to pay a distribution to other unsecured trade creditors. .”
Under the Corporations Act, directors can apply for court orders allowing them to transfer shares.
“In the event that some shareholders do not agree with the transfer of their shares into the company, please be aware that we are seeking court orders allowing us to sign the transfer of shares in place of any shareholder who does not execute not his action. transfer, if E&A Limited’s proposal is accepted and the company enters into DOCA,” McPherson wrote.
“We do this on the basis that the transfer of shares is not, in our opinion, unfairly prejudicial to the interests of the members of the company.”
Meertens has until July 13 to file its report with creditors, seven days before the proposed July 20 meeting.
Stirling said that if DOCA goes ahead, most creditors would not be paid in full, but would receive significantly more than if the company went into liquidation.
“In reality, given that the company cannot pay all of its creditors in full, and that the business has been trading at a loss for some time, there is no value in the shares, and allowing the DOCA proposal to moving forward at least offers benefits to the company’s employees and creditors,” he wrote.
“The faster the transfer of shares to the new owner, the greater the likelihood of success of the new Nobles journey.
“The board recognizes that this is not just a financial transaction, it is the end of an era for Nobles.
“During these very difficult years of COVID and the slow recovery of our industry, we have continued to uphold the Nobles brand of quality and we may see it endure for the next 110 years yet.”
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