McAleese morphs into Rivet

Rivet is the latest reincarnation of the former McAleese, but where did it all go wrong in the first place?

As the dust is still settling around the country on the collapsed transport group McAleese, administrators have retained Chief Executive Mark Rowsthorn to head up the newly formed Rivet after equity stakeholders were wiped out.

Rivet will specialise in mining, energy and aviation fuelling services after retaining McAleese's profitable businesses and most of its employees following the transport group's restructuring in late December.

Former Asciano executive Philip Tonks will be Rivet's Chief Operating Officer.

The successful restructuring is a victory for Mr Rowsthorn, who fought to keep the transport group alive following its disastrous initial public offering and collapse into administration.

During 2016 Mr Rowsthorn maintained that McAleese, which operated in heavy haulage, iron and gold ore bulk cartage as well as fuel haulage, had been one of the "victims of the resources boom that slid into freefall".

But the writing for McAleese was on the wall along time before the demise of the mining boom.

McAleese lost numerous customers and damaged its reputation as far back as 2013 after one of its Cootes fuel tankers crashed in Sydney shortly ahead of its float, killing two people.

The acquisition of Cootes from Champ Private Equity in 2012 wasn’t a good one. It is rumoured that McAleese overpaid for it and what they bought wasn’t what they thought it was.

The Cootes family created an iconic Australian trucking business famous for its fleet quality, that many to this day still aspire. However after years of private equity ownership and a previous bankrupt owner in ION Group, it was run down by the time McAleese took it on.

On top of that, the double fatality involving a Cootes tanker caused the oil companies to take another look, and they took much of their business elsewhere. Cootes quickly diminished from there, but the balance sheet was left with the legacy of having paid too much for a much bigger business. Who knows why investors signed up in droves for Initial Public Offering just weeks after the accident, because the response of the oil companies was fairly predictable.

In April 2014 McAleese purchased WA Freight Group for $15.4 million.

Then, in a November 2014 press release, McAleese announced it has taken a 50 per cent stake in freight firm Heavy Haulage Australia (HHA) in a bid to broaden its reach into the infield oil and gas sector.

The release confirmed that McAleese would pay $3 million for a 50 per cent share of HHA and also gave McAleese the option for a full takeover of HHA in two to five years.

"The key strategic reason for this investment is the opportunity to diversify into the attractive infield oil and gas sector, which demonstrates strong long-term growth prospects," McAleese managing director and CEO Mark Rowsthorn said at the time.

Nevertheless when the market finally woke up, other acquisitions were on the radar that just compounded the problem. The HHA investment was said to be bullish at a time that called for restraint while the WA Freight Lines acquisition did little to help McAleese’s strategic objectives. It was rumoured that these investments caused some to suggest that management were aloof to the issues.

McAleese's stock listed at $1.47 a share in late 2013 but was trading at just 2.5¢ when it went into administration in August.

Although shareholders will receive nothing for their McAleese stock – including Mr Rowsthorn, who owned 29 per cent of the company – the restructuring agreement enables some 150 employees who lost their jobs to receive full redundancy payments. Some 1350 other employees will remain with the company.

Hong Kong investment group SC Lowy, McAleese's largest secured creditor with $177 million of senior debt, provided $10 million towards a fund for payments to employees and unsecured trade creditors. Unsecured creditors include fuel companies Caltex and BP Australia, tyre firm Michelin Australia and ASX-listed vehicle dealer Automotive Holdings Group.

Their new website www.rivet.com.au claims, Rivet is an Australian provider of specialised transport and logistics solutions.

The Rivet Group operates four businesses primarily operating in the heavy haulage, specialised transport, logistics and lifting industries, and has in excess of 1300 employees spread across Australia.

McAleese morphs into Rivet

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