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Just over one year ago, Auckland based company, Pacific Scaffolding thought their business was over. But, after a recommendation from their accountant to contact BWA Insolvency, they made the first move that saved the company from closure and secured more than 20 jobs.
Mike Robins, Pacific Scaffolding Director said that his business with its somewhat archaic work practices and high fixed costs, had been struggling to perform in today’s tight economy. “There was little work in the pipeline, creditors were piling up and it was becoming hard to pay his workforce”, he said. Pacific Scaffolding was facing liquidation or receivership.
“In July last year, after recommendations from both my lawyers and accountants, I turned to Bryan Williams at BWA Insolvency. Bryan was able to assess the issues and see value in Pacific Scaffolding after our first meeting – this was certainly at odds to previous advice, which was basically pack up and shut up shop” he said.
Robins explains that BWA Insolvency stood behind them to make sure they could continue as a business. They were able to freeze current creditors to gain enough breathing space to address the issues under a regime called Voluntary Administration.
Voluntary Administration (VA) is regime thatallows businesses that would otherwise have been forced to close to get back on their feet. A deed of company agreement (DOCA) is negotiated and set up between the business and it’s creditors. It dictates how trade will be done. During the early stages, called the intervening period, BWA guarantees that creditors will be paid and therefore allows the business to continue receiving crucial goods and services to continue operating.
Robins said “No one goes into business to hand over control to an outsider, so initially I struggled with this concept, but I was really surprised at how quickly Bryan and his team were able to form a rapport with all of the staff and instill in us the confidence we needed to move ahead”.
Bryan Williams, Director of BWA Insolvency, said that rehabilitating a business is what he and his team set out to do first and foremost. “While we are insolvency practitioners, we specialise in Voluntary Administration. It gives businesses a chance to rehabilitate and is a much better alternative than the demise of that company.”
He added, “If a business has just a small chance of survival, we will find that chance – we’ll put all of our resources in to it and make sure it happens. With Pacific Scaffolding we focused on modernising their operations, reducing unnecessary costs and building profitable clients.”
BWA dived right into practices and worked staff across the business to establish new strategies – one of which was the introduction of a new piecework system where employees were paid based on the job done rather than an hourly rate. Wages increased by up to 40% and productivity by 60%. Robins states, “we are now not losing money on our workforce, they are better paid and work more efficiently – it’s a win-win situation for all.”
Just 12 months later and after a lot of hardwork, Pacific Scaffolding has reached the final stages of VA with total control of the company about to return to Robins. “Getting up in the morning is a lot easier, I know I’m heading into a much more agile business, one that has a fine future” Robins said.
Pacific Scaffolding Limited and it's associate companies, Access Scaffolding Limited & Advance Scaffold Limited are 100% New Zealand owned and operated. Established in 1987, they are Auckland's premium scaffolding and access companies in both steel and aluminum - specialising in residential and light commercial applications as well as a range of specific scaffolding needs.
BWA Insolvency is an Auckland based insolvency practice that has been helping businesses across New Zealand for 20 years. BWA provides expert advice and bespoke recommendations in liquidation, receivership, reconstruction and creditor compromise. They are specialists in working with businesses to restore their profitability under the Voluntary Administration law.
Voluntary Administration (VA) is the proactive alternative to liquidation or receivership. Established in New Zealand in 2007, it is a regime that provides a rehabilitation option for companies of all shapes and sizes that are facing closure. It provides the breathing space to address the issues consuming a business. The VA process is normally achieved by the Directors’ appointment of an Administrator. The Administrator takes control and responsibility of the business while working with the Company’s Directors to establish the best course of action.
Watch the five minute video interviewing Mike Robins (Director Pacific Scaffolding), Bryan Williams (Principal, BWA Insolvency) and Craig Wright, Cartune Auto Service Centre in Ponsonby – another restored business with the help of BWA Insolvency.