ACCORDING to the website of national transport company Mannway Logistics, "there's something very reassuring about being a Mannway client".
Sadly, it's not so reassuring being a staff member. More than 300 employees will be out of work before Christmas after receivers Ferrier Hodgson failed to negotiate a sale to Frank Costa's transport company, Costa Logistics.
In October, Ferrier Hodgson partners George Georges, Brendan Richards and Morgan Kelly took control of Mannway after being called in by the company's financier, GE Corporation. At the time the trio said it was "business as usual" at Mannway.
Georges described the company as a "long-established, well-known transport business with an impressive number of blue chip customers". He said Mannway had been a "victim of the extraordinarily difficult conditions facing the transport industry", but believed "in the hands of another transport operator it will represent excellent value".
Despite the upbeat sentiment, Ferriers has been unable to deliver Mannway into the hands of another operator. Costa Logistics, owned by 71-year-old Geelong millionaire Frank Costa, whose fortune is estimated at $200 million, emerged as the only serious buyer.
The receivers have pulled the pin on that sale, and a number of Mannway's clients have since struck deals with rival transport companies, including key client BlueScope Steel. It has used Mannway to transport products across the country for a number of years. It is believed much of that BlueScope work has been picked up by listed transport company K&S Corporation.
Other companies that used Mannway included Bunnings, OneSteel, Amcor, Kleenheat and Goodman Fielder.
The Costa camp is believed to be livid with the decision by Ferrier Hodgson not to sell Mannway. Some suggested over the weekend it was in the interests of the receivers to engage in a lengthy liquidation process, selling off Mannway's 10 warehouses and fleet of more than 600 trucks, rather than negotiate the quick sale of the company.
Costa Logistics chief executive Tim Bolam refused to comment on the breakdown of negotiations with Ferriers, but confirmed his company had made a formal offer.
"Costa Logistics was a serious buyer for the Mannway business," Bolam said.
"We believe our price was right, as there appeared to be no dispute with the administrators in that regard. We committed considerable time and resources to investigate its viability and we believe it would have complemented our existing operations as one of the country's leading providers of cold store logistics."
"Costa Logistics is very focused on our staff . . . and we believe we could have avoided the Manway staff going into Christmas without a job. Having said that, one of our overriding concerns was to ensure that we undertook a due diligence process to ensure the future of our existing customers and employees moving forward."
Georges said Ferrier Hodgson was involved in "extensive negotiations with one party" but could not agree on terms.
"Ferrier Hodgson went to great lengths to get the deal across the line it would never be in our interests to see it fail," Georges said. He added that the offer received was only for part of the company and "required a significant trading risk to be carried by Mannway over Christmas".
"We came close to an agreement, but unfortunately this party's reluctance to remove its strict conditions meant the deal was unworkable," Georges said.
Mannway was founded in 1979 by Melbourne's Mann family, which sold the business in 1993 to Stuart Brown, a senior executive at Linfox.
In 2005, Mannway bought Trueline Transport. It has since purchased BlueScope's logistics terminal in Sydney and a rail terminal operation in Newcastle.
In 2007, Mannway bought Dove Transport & Storage and Coolaroo-based RSP Transport. That year it also added Port Kembla-based steel carrier Tex Transport.
That's a bonus
"NEVER write off Goldman Sachs" is a good rule to live by.
After the near-death experiences many Wall Street banks encountered last year, Goldman's share piece has doubled this year, on the back of $US12.5 billion ($A13.7 billion) of earnings through the first nine months of 2009.
That means bonus season will be big again the bank set aside $US16.7 billion for pay, health insurance and other benefits this year, which is about, or 43 per cent of net revenue.
Little wonder, then, that the bank changed its bonus policy, to thwart moves to tax executive pay.
Goldman's 30-strong management committee will receive their entire 2009 bonus in scrip that must be held for five years. As we said, always a step ahead.
Frequently Asked Questions about this Article…
What happened to Mannway Logistics and why were receivers appointed?
Receivers from Ferrier Hodgson took control of Mannway Logistics in October after being called in by the company’s financier, GE Corporation, because Mannway was facing extremely difficult conditions in the transport industry and could not meet its financial obligations.
How many Mannway employees were affected by the receivership and job losses?
The article reports that more than 300 Mannway employees were expected to be out of work before Christmas after receivers failed to complete a sale of the business.
Why did the proposed sale of Mannway to Costa Logistics fall through?
Ferrier Hodgson could not agree on terms with Costa Logistics: the offer was reportedly only for part of the company and included strict conditions that would have required significant trading risk to be carried by Mannway over Christmas, making the deal unworkable.
Who are the receivers handling Mannway’s affairs and what did they say about the sale process?
The receivers are Ferrier Hodgson partners George Georges, Brendan Richards and Morgan Kelly. They said they engaged in extensive negotiations and tried to get a deal across the line, but could not agree on workable terms with the interested party.
Which major Mannway clients have moved their business since the receivers pulled the pin on the sale?
Key clients that used Mannway included BlueScope Steel, Bunnings, OneSteel, Amcor, Kleenheat and Goodman Fielder. The article says several clients have struck deals with rival transport companies, and much of BlueScope’s work is believed to have been picked up by listed transport company K&S Corporation.
What assets of Mannway might be sold if receivers pursue liquidation?
The article suggests receivers could sell Mannway’s 10 warehouses and a fleet of more than 600 trucks as part of a lengthy liquidation process rather than a quick sale of the business.
Who owns Costa Logistics and what was Costa’s stance on buying Mannway?
Costa Logistics is owned by Frank Costa, a Geelong businessman said to be 71 years old with an estimated fortune of $200 million. Costa Logistics confirmed it made a formal offer and maintained it was a serious buyer that believed its price was right and that it could have protected staff via due diligence.
What did the article say about Goldman Sachs’ earnings and bonus policy, and why might this matter to investors?
The article noted Goldman Sachs earned about US$12.5 billion in the first nine months of 2009 and set aside US$16.7 billion for pay and benefits (around 43% of net revenue). It also reported Goldman’s 30-person management committee will receive their 2009 bonuses in scrip that must be held for five years — a policy detail investors may watch as it affects executive incentives and long-term alignment with shareholders.
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