Pilbara-based Eastern Guruma contracting company, which has multi-million dollar projects with some of the biggest names in mining, is expected to face a significant restructure after being placed in voluntary administration with unspecified debts.
A team of administrators was this week poring over the books of the company, which is owned by members of the Eastern Guruma traditional owners in WA’s Pilbara and which has interests primarily in the mining and pastoral sectors.
Administrator Kim Strickland, a partner in Perth-based WA Insolvency Solutions, told NIT it would take several days to uncover the company’s true financial position and the extent of its debts.
“At the moment the financial position is unclear,” he said.
“There are various loans between companies in the group.”
Mr Strickland said it was too early to know if any of Eastern Guruma’s 180 employees would lose their jobs.
He said he was confident the company could trade out of its financial difficulties.
The Eastern Guruma website lists some of its current projects as a $40 million road maintenance contract with Fortescue Metals Group; a $300 million mining services contract with Rio Tinto and Brierty; and a $34 million drilling contract, also with FMG.
Mr Strickland said Rio Tinto and FMG remained supportive.
Three administrators were appointed to the parent company Eastern Guruma Pty Ltd on Thursday, after a request by the company’s directors.
Mr Strickland said it was not yet known if some of Eastern Guruma’s subsidiaries would also go into administration.
The company’s two main subsidiaries are Pilbara Aboriginal Investment Pty Ltd and the Eastern Guruma Pastoral Company Pty Ltd.
Other investments such as the Mt Barnett Cattle Company Pty Ltd — which is 50 percent owned by the Eastern Guruma Pastoral Company — and the Gibb River Cattle Company, in which it is a joint venture partner, may also be affected.
Mr Strickland said the financial problems had arisen in Eastern Guruma’s contracting arm.
He said the company had been losing money on some of its contracts, which had affected cash flow.
Mr Strickland said a report on the company’s financial position would go to creditors in late November.
A creditors meeting would be held in five weeks. It was hoped a plan to restructure the company could be put to the meeting.