Engineering company RCR Tomlinson has appointed administrators due to ongoing financial issues.
RCR yesterday explained in a statement that it was not able to secure additional funding since going into a trading halt on November 12.
Three voluntary administrators from McGrathNicol Restructuring are attempting to stabilise the company’s operations and commence an immediate sale process.
McGrathNicol said it was “urgently seeking funding from the RCR Group’s financiers”.
The announcement follows Wednesday’s news that a law firm was filing a class action against RCR on behalf of its shareholders due to a large wipe in the company’s share price in August.
RCR’s share price fell from $2.12 at the end of July to $1.05 by the start of September. Its value has since fallen further and currently sits at 87 cents.
The August drop was largely related to issues with RCR’s solar farm investments in Queensland, which have suffered from a write-down of around $57 million.
Peter Ong, Electrical Trades Union state secretary for Queensland and Northern Territory, was critical of RCR and urged the Queensland Government to better regulate renewable energy contracts.
“This company’s business model of significantly undercutting competitors during the tender process delivered nothing but a race to the bottom on wages, safety and conditions and highlights the perils of privatisation,” he said.
Despite RCR’s financial troubles of late, the administration comes as a shock — in August, the company announced a $100 million capital raising that eventually brought in $84.4 million.
In the same month, the company also had a $1.1 billion order book and revenues of $2 billion, up 58 per cent on the previous year.
It represents a massive turnaround in fortunes for RCR Tomlinson, which employs over 3400 people across Australia, New Zealand and Southeast Asia.
In existence since 1898, the company celebrated its 120th anniversary this year.