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Fall from grace

Wednesday, 14th January, 2015

By Andrew Robertson

Four years ago Macquarie Drilling and its founder Michael Petrozzi were riding the resources boom.

Revenue had almost doubled to $21 million from the previous year and the privately-owned company could barely keep up with demand for its drilling services. 

It had even made it on to Business Review Weekly’s (BRW) list of the 100 fastest growing companies in Australia - for the second successive year.

The company had not long expanded its operations into Broken Hill with a little help from the State government, which provided some financial assistance.  

But now the former fast 100 company has fallen hard. Over 100 employees across several states suddenly found themselves without a job just after Christmas when administrators were called in.

They were told there was “insufficient cash available” for the administrators to trade Macquarie. 

But creditors have told the BDT that there has long been signs the company wasn’t travelling well.

One told the BDT yesterday that Macquarie had been on a cash only basis with its local suppliers for some time.

Another said it owed money to “just about every” business associated with the mining industry locally. 

Dr Petrozzi himself has said that a number of local staff had resigned in the weeks and months before administrators were called in.

Creditors are yet to found out how much money they will get out of the businessman, who is still running Macquarie under licence, and expects to present a restructure proposal to creditors soon.

A list of assets and liabilities provided to them reveals his three companies have net assets totalling just over $6 million.    

However administrator Neil Cussen has told them to expect a possible negative net asset position once the actual value of the assets, including plant and equipment, are determined. 

Dr Petrozzi, yesterday, blamed a combination of bad luck and a general decline in the mining sector for his company’s decline. 

A case of boom turned to bust.

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