Ostwald debt sky-rocketing

Liquidators put liabilities at $76.5m

‘‘ WE DO NOT EXPECT TO PAY ANY DIVIDEND TO NON-PRIORITY CREDITORS.

THE debt of failed Dalby company Ostwald Bros has skyrocketed to more than $76 million, according to liquidators.

PricewaterhouseCoopers revealed the staggering sums in a circular to creditors of two entities of the former civil construction firm last month.

Liquidator Sam Marsden put the most optimistic asset figures for Ostwald Bros Civil and Ostwald Bros Pty Ltd at more than $11.4 million, though this figure could be as low as $6.7 million.

In contrast, debts to creditors like retrenched employees, the ANZ Bank, the Australian Taxation Office and subcontractors have been set at $76.5 million, up from the $61 million reported late last year.

Mr Marsden, who has carried out the liquidation with Derrick Vickers, wrote that the chances of non-preferential creditors getting money from the wind-up were slim.

“Given the significant amounts owed to the ANZ Bank and to FEG (Fair Entitlement Guarantees) on account of priority employee entitlements, we do not expect to pay any dividend to non-priority creditors in this matter,” he wrote to creditors of Ostwald Bros Pty Ltd.

Further investigations also found nearly $400,000 in preferential payments were made to creditors before the liquidation process began late last year.

PwC has continued probes into insolvent trading and uncommercial transactions with the company.

A spokeswoman said a creditors meeting was expected to be held before the end of the month, with an exact date yet to be set.

SAM MARSDEN