A South Australia-based international engineering and manufacturing company with a turnover of $19 million has been placed in receivership and its operations have ceased.
Initial investigations reveal the company Priority Engineering Services was hard hit by the global financial crisis in 2008 and was unable to recover.
Established in 1984, Priority Engineering Services offered general engineering services in Australia and Malaysia and manufactured purpose-built machinery for the defence, mining and automotive sectors.
BRI Ferrier administrators Alan Scott and Andre Strazdins have been appointed and Ferrier Hodgson has appointed receivers and managers.
According to a report in SmartCompany, Mr Scott said investigations were yet to reveal the precise amount of debt, but the largest creditor, the company's bank, was owed a "significant" sum.
While at this stage the business is up for sale, Mr Scott believes there is a high chance it will fold.
"I will be investigating and forming an extensive report to the creditors. I think I know what the company's future is, I think it will fold, but that really depends on how the receiver goes in selling the business.
"I know myself and others are hoping the sale is managed well, but it clearly won't continue to trade at the moment, that's already been decided, because there is simply not enough work to do," he says.
At its highest point, Scott says the business had around 110 employees, but when it collapsed the number was closer to 86. The workers were told on March 18 they were being made redundant. Half-a-dozen employees currently remain as business matters are finalised.
The receiver of PES, Ferrier Hodgson partner John Hart, says preliminary indications suggested the business had been negatively impacted by the global financial crisis and had never recovered.
An advertisement was placed in The Australian Financial Review last week regarding the sale of the company.