A viable business under pressure

Case Study

Industry: Mining & Infrastructure / Construction
Location: Western Australia
Employees: Seven staff
Annual revenue: Approximately $2 million

Reinforcing the foundations of a WA manufacturer

A Western Australian company supplying purpose-designed pre-cast concrete products to Tier 1 construction and mining operators faced financial distress after a combination of director health issues, management challenges and accumulating tax debt. With seven employees and annual revenue of around $2 million, the business remained operationally viable but required a structured solution to stabilise its position and restore creditor confidence.

“This was a business with strong products and a clear market need, but it needed breathing space and a disciplined plan to move forward,” says Peter Brown, Principal of WA Insolvency Solutions (WAIS).

Background:

Operational strength overshadowed by external pressures

The company manufactured safety-focused pre-cast concrete products designed to reduce construction time, improve site safety and lower project risk on major infrastructure projects. Operating locally in WA, it supplied contractors across the mining and construction sectors.

Financial distress arose primarily from director health issues and management challenges, which disrupted oversight and contributed to the accumulation of significant tax liabilities. Despite these challenges, demand for the company’s products remained steady.

The solution:

Building a viable path forward

WAIS was appointed to guide the company through the Small Business Restructuring (SBR) process, working closely with the director and the company’s accountant.

The team led a detailed profitability analysis and prepared robust cash-flow forecasts demonstrating the company’s ongoing viability through targeted cost reductions and profit-maximising changes to the business model. All outstanding tax lodgements were also brought up to date, providing a clear foundation for restructuring.

“We needed to demonstrate not only that the business could survive, but that it could operate sustainably under a revised structure,” Brown says.

A comprehensive report to creditors outlined the company’s history, financial position, the director’s proposal and a comparison between the likely outcomes under liquidation versus the proposed SBR plan.

Navigating complexity:

Engaging early with the ATO

While the matter was relatively straightforward overall, a critical challenge emerged when the ATO initially indicated it would not support the proposal. Importantly, the ATO provided detailed reasons for its position, allowing the team to refine and restructure the proposal to address those concerns. The revised proposal was ultimately accepted.

Timing also proved crucial. By issuing the draft proposal before a period when the ATO advised it would be unable to provide feedback due to resourcing constraints, the team secured early engagement that proved decisive.

“Understanding the nuances of the SBR regime – and acting quickly – made all the difference,” Brown says. “That early dialogue allowed us to reshape the proposal in a way that achieved support.”

Results:

Stability restored and jobs preserved

The company was successfully restructured, allowing it to continue trading as a going concern. All seven employee positions were retained, and the business now operates on a more sustainable footing.

“This outcome demonstrates how the SBR process can preserve viable businesses that might otherwise have been lost,” Brown adds. “It provided certainty for creditors, stability for employees and a clear path forward for the director.”