A luxury Australian caravan manufacturer owes about $40 million to creditors after its sudden collapse last week.
Zone Manufacturing Pty Ltd plunged into administration last week, leaving about 240 staff unemployed and 180 customers in limbo.
The Sunshine Coast-based company built premium caravans under the Zone RV brand and continued taking customers’ money until the final hours before it shut down.
At the first creditors’ online meeting on Wednesday, administrators Cor Cordis revealed the staggering extent of Zone RV’s woes.
Customers are short about $18 million, suppliers are owed up to $20 million, and employee entitlements are $4 million, while taxpayers are on the hook for $1.4 million from unpaid taxes.
Cor Cordis partner Rahul Goyal told about 250 individual creditors who joined the meeting that he was still investigating how Zone RV ended up in this position.
“It’s unusual for a business of this size to owe this amount of money,” he said.
A newly installed security camera sits monitoring vans at Zone RV’s headquarters in Coolum. (ABC Sunshine Coast: Josh Dye)
Creditors in limbo
Zone RV had an annual turnover of about $70 million and Mr Goyal pained a bleak picture for the majority of unsecured creditors, including suppliers and customers.
“If the company was to be liquidated, the chances of getting anything is quite remote,” he said.
There are about a dozen caravans parked in the yard of Zone RV’s Coolum factory, with many displaying a “complete” sign.
While most of the 280 employees have been sacked, there are still 30-40 workers employed and some of them are working on vans.
Cor Cordis has beefed up security around the premises by adding a large CCTV camera at the gate to protect the remaining assets.
Mr Goyal provided a glimmer of hope to a small group of customers who paid their final instalments, indicating they were the most likely to receive their vans, many of which are finished or close to completion.
“I want them all out by the end of next week, the ones that are fully completed,” he said.
The future is much less clear for the remaining customers.
“If you’ve made first and second payments, your caravan is unlikely to be in a production line anywhere,” Mr Goyal said.
“If you’ve made a third payment, it may or may not be in production.”
There are about 180 customers who are owed different amounts of money, ranging from people who have paid a $15,000 deposit to those who are $270,000 in the red.
If you know more about this story, contact Josh Dye at dye.josh@abc.net.au.
Financial woes revealed
The ABC has obtained a copy of Zone RV’s latest annual report, which highlights the company was under significant financial stress 18 months ago.
The audited report shows the business made a $4.75 million loss in the 2023-24 financial year, while carrying net liabilities of $10.8 million.
The auditors at the time expressed concern about the company’s future.
“The ability of the [Zone RV] group to continue as a going concern is principally dependent upon current cash funding held and the ability to raise additional capital or secure other forms of financing,” they said.
“These conditions give rise to material uncertainty which may cast significant doubt over the group’s ability to continue as a going concern.”
In June 2023, Zone had revenue of $77 million and a wage bill of $4.6 million, while it held $2.4 million in cash.
There was about $400,000 owing to employees in leave and superannuation entitlements.
Zone RV co-founder and sole director David Biggar runs several other companies. (Supplied: Youtube)
The company still owed $765,900 to ex-founder Matt Johns, who left after falling out with co-founder and current director David Biggar.
Zone was holding $16.3 million in customer deposits and progress payments that people had paid in advance for their caravans.
The business paid no dividends in 2023-24 to any of its shareholders, which included Mr Biggar as sole director.
Mr Biggar and unspecified “key management personnel” were paid $888,219 in the financial year, according to the report.
Mr Biggar is a director of at least 10 different companies, according to documents from the Australian Securities and Investments Commission.
The ABC attempted to contact Mr Biggar at his registered address on Tuesday, but he was not at home.