A report into a Coolum-based caravan manufacturer that went into administration late last year has revealed the company may have been insolvent since as early as August 2023.
The administrators of Zone RV have released their report to creditors ahead of a meeting on Thursday, when a vote on the future direction of the company will be held.
Zone RV Holdings Pty Ltd and Zone Manufacturing Pty Ltd entered voluntary administration on December 1 following what restructuring advisory firm Cor Cordis called “sustained cash flow challenges and operational pressures”.
Administrators Kate Conneely, Rahul Goyal and Stephen Earel have recommended that creditors vote to wind up Zone RV so they can continue their investigations.
It was revealed last month that about 240 Zone RV employees had been made redundant, with the company having about $40 million in debts.
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The report to creditors outlines the current status of the administration, Zone RV’s financial position, the causes of its insolvency and the potential causes of actions available if Zone RV is placed into liquidation.
“It is of note that Zone RV’s failure can be generally attributed to the incurrence of substantial losses in its One Composites business, particularly from FY23 onwards,” a Con Cordis media statement said.
“Conclusively determining a date of insolvency requires further investigation; however, it is likely that Zone RV has been insolvent since September/October 2024, though it could be as early as August 2023.”
The statement said the administrators were appointed to stabilise the business, assess restructuring pathways and run a sale process, both whole-of-business and asset-by-asset, to maximise potential recoveries.
“With the assistance of our forensic team, a significant amount of data was analysed in a very short space of time,” Ms Conneely said.
“The analysis clearly demonstrates that further investigation is warranted and that current and former officers of Zone RV need to explain several transactions.
“These further investigations will advance the preliminary investigations completed and direct the next steps, which may include public examinations or proceeding with litigation seeking compensation on behalf of the creditors of Zone RV.”
The administrators have continued to operate the business in a limited capacity to showcase its operations to interested parties. During the administration period, about 38 caravans will be completed and handed over to Zone RV customers. These caravans were close to completion or could be completed in a very short time.
“While it will be great to see 38 customers receive a caravan during these tough times, 148 customers may not receive a caravan unless there is a sale of the business and the existing contracts are honoured,” Ms Conneely said.
The administrators have commenced an expedited sales process, with 27 expressions of interest received for the whole or various parts of Zone RV. Due to the holiday season, the sale timetable has been extended to accommodate interested parties and maximise competitive tension.
At the time the report was issued the administrators had received several indicative bids, which were being assessed.
