Reuters: Private Equity: REFILE-UPDATE 1-Australia's Hastie collapses amid struggles for building sector

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REFILE-UPDATE 1-Australia's Hastie collapses amid struggles for building sector May 28th 2012, 01:08 Sun May 27, 2012 9:08pm EDT MELBOURNE May 28 (Reuters) - Australian engineering company Hastie Group said on Monday it has appointed voluntary administrators after recapitalisation talks stalled over an "accounting irregularity", in a case that also highlights tougher times for the nation's construction sector. In Australia's two-speed economy, non-mining sectors of the economy are struggling even as miners are looking to import migrant workers to meet chronic labour shortages in the country's far north and west. The Reserve Bank has said that more jobs may be lost in sectors such as manufacturing, retail and residential construction due to strength in the Australian dollar and a weak outlook for the housing sector. The collapse of Hastie, which employs 7,000 people and which provides refrigeration and air conditioning services for the building industry, is also likely to hurt its lenders and private equity firm Lazard which holds a 25 percent stake. The Sydney Morning Herald reported on Monday that Australia's four biggest banks would face writedowns totalling almost A$250 million ($245 million), with Australia and New Zealand Banking Group believed to be owed A$150 million of that. Its other lenders include the Commonwealth Bank, National Australia Bank and Westpac. Lazard holds its stake in Hastie after taking part in a recapitalisation last year that included an issue of A$160 million in new shares. If administrators do not reach an agreement with creditors, they will embark on steps to wind up the business. Hastie reported on Friday a A$20 million "accounting irregularity", saying that an initial investigation showed an employee had falsified accounts to meet profit forecasts. Hastie and its 44 subsidiaries, which were all placed under administration, and provides technical and engineering services in Australia, Britain, Ireland and the Middle East. Hastie posted a loss of A$149 million in the six months to December and its share price has tumbled from A$9 last year to A$0.16 before the shares were suspended in April. Link this Share this Digg this Email Reprints

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