Billion dollar risk

Tasmanian company listed as in danger

A TASMANIAN company is one of seven billion-dollar businesses around the country identified by new research as being at high risk.

According to a study by insolvency specialist SV Partners, almost 9000 business nationally have a high or severe risk of financial failure in the next year.

That compares with more than 12,000 a year ago.

The insolvency outlook re- port found seven of the highrisk companies had annual turnovers of more than $1 billion, indicating there is a potential for hundreds of suppliers, creditors and staff to be affected if they collapsed.

This compared with six companies with turnovers of $1 billion or more a year ago.

SV Partners does not disclose the names of companies it believes are at high risk.

The Tasmanian company is only identified as a manufacturing company.

Overall, the percentage of businesses at high or severe risk of failure in the next 12 months has fallen from 2.4 per cent a year ago to 1.8 per cent, SV Partners believes.

According to the group’s March report, the industries most at risk broadly are construction, accommodation and food services and retail.

The construction sector has the biggest number of companies at risk nationally, SV Partners says, accounting for 1192 nationally, followed by ac- commodation and food at 1084 and retail at 916.

NSW has three high-risk companies in the $1-billionplus bracket — one is in manufacturing, one in transport and warehousing and the third in electricity, gas and utility services.

Among other companies, 21.5 per cent were classified as being at medium risk and 76.7 per cent at low risk.

In Victoria there were now two high-risk companies with turnovers of $1 billion or more, SV Partners director Michael Carrafa said. In Queensland, a company in the mining sector is the nation’s seventh highrisk billion-dollar company.

Those classified as being at high to severe risk are companies in distress, where the chances of bringing the business out of distress are judged to be low.

“These businesses need a rapid assessment of options and only quick-win strategies are likely to have any effect,” Mr Carrafa said.