Home > Forge Group goes into administration as ANZ withdraws support

Forge Group goes into administration as ANZ withdraws support

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Embattled mining services company Forge Group has gone into administration after ANZ Bank withdrew financial support for the business.

The company today notified investors it will be placed in a trading halt saying its financiers had withdrawn support.

WestBusiness reports that Forge is expected to announce later today that it will be placed into the hands of KordaMentha as receivers and Ferrier Hodgson as administrators.

The future of the Perth-based contractor has been unstable since November when it revealed profits were well below guidance this financial year, revealing a $127 million write down which it attributed to two power station projects.

At the time the company said an internal review had "identified concerns in relation to the underperformance" in relation to its $420 million Diamantina contract in Queensland and its $150 million contract with Rio Tinto at the West Angelas iron ore mine in Western Australia. 

While last-month the company flagged losses for 2014 to total $25 million before one-offs and writedowns.

ANZ was prepared to extend extra credit to Forge, but the developments in recent weeks forced the financier to reassess.

Forge CEO David Simpson has previously said FY14 has been a challenging period with increased competition and slowing domestic activity.

Forge said it could not comment on the matter when contacted by Australian Mining.

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