By Mark Hawthorne and Madeleine Heffernan
The collapse of engineering services company Hastie Group will cost 2500 jobs, wipe an estimated $300 million from the profits of the major banks and strike at the wealth of some of Australia's richest families.
Staff from administrator PPB Advisory and receiver McGrathNicol yesterday picked over the Hastie carcass after one of Australia's biggest corporate disasters since the global financial crisis of 2008.
The banks that lent to Hastie Group to fund its rapid expansion are owed $503 million in loans and guarantees, taking this collapse past the $440 million fall of retailer Colorado Group last year.
Both accounting firms were appointed at 9am yesterday, and by late afternoon they had upped the estimate of job losses from 2000 to 2500. More than 2700 workers were notified by text message that they should attend meetings at work to find out about their futures. All were stood down without pay for 28 days, pending a salvage operation by PPB Advisory.
''This is going to be ugly,'' said one of the accountants working at Hastie's Auburn office in Sydney. ''These are people who have lost their jobs with Hastie for good.''
Hastie chief executive Bill Wild, who has only been in the job since October last year, emailed all of his 4300 Australian staff yesterday.
''Again I apologise for what has happened. I wish you all the very best in the difficult times ahead,'' he wrote.
Mr Wild told BusinessDay: ''I wanted to tell the staff and workers it's not their fault. They worked long and hard for this company and their management let them down. Most of this workforce will ultimately find work … but there are going to be a lot of dark days for many families.''
Mr Wild revealed that the accounting irregularity that sank the company totalled $23 million - more than the market value of Hastie Group when it collapsed. He said he did not believe the unnamed senior staff members suspected of falsifying the accounts had done so for personal gain.
''In the end it wasn't one individual that was at fault,'' Mr Wild said. ''It was a culture of 'no bad news' within this company that was at fault. An individual made a terrible mistake because of that culture, and is very sorry about what they have done.''
Electrician Mark Guest, who has worked at Port Melbourne-based Watters Electrical, part of the Hastie Group, for two years, said he received a text message just before 7am.
''It's just a bit of a bombshell for all the blokes, because what do you do?'' Mr Guest said.
''I'm a little bit older, my mortgage is nearly paid off, so I'm probably not in as bad a position as some of the others. But I know a lot of them, they could lose their house in 28 days the way banks are at the moment. We can't access unemployment or our redundancy fund.''
Of the more than 50 subsidiaries that formed Hastie, just 10 will survive. They are now in the control of McGrathNicol, which is working on behalf of Australia's banks.
ANZ tops the list of creditors, with $150 million owed. Westpac is owed upwards of $80 million while NAB's exposure is an estimated $35 million. Commonwealth Bank is believed to be owed $20 million. The debt numbers are growing as accountants dig through the books of the failed company.
Late yesterday it emerged that the only parts of Hastie's Australian empire that would survive were Spectrum Fire and Safety, Hastie Services, Gordon Brothers Industries, Austal Refrigeration (plus two related companies), Comcool, QAL Refrigeration (WA), Techni Doors and Lawrence Refrigeration. They will be sold by McGrathNicol to recoup money for the banks.
PPB Advisory chairman of partners Ian Carson said that a ''substantial number of lenders won't get their money back''. Other lenders include Bank of Scotland, Ulster Bank, HSBC Australia and HSBC Middle East.
He also said that PPB had received a handful of inquiries from unnamed vendors of Hastie assets about buying back those assets.
The Electrical Trades Union will hold a mass meeting of staff affected by the collapse at its North Melbourne offices this morning.
It also plans to take Watters Electrical to Fair Work Australia this afternoon in a bid to force the company to make workers redundant immediately rather than make them wait 28 days.
Union state secretary Dean Mighell flew to Canberra yesterday to discuss the situation with Workplace Relations Minister Bill Shorten.
Investors in Hastie include Thorney Group, the investment vehicle of Melbourne packaging family the Pratts, and Lazard Asset Management - backed by millionaires John Wylie and Mark Carnegie - which became a cornerstone investor through Hastie's $160 million capital raising last year.
Before entering a trading halt in April, Hastie's shares had tumbled from $2.17 at the end of May 2011 to just 16¢.
with MEGAN LEVY and CLAY LUCAS