‘Clearly necessary’

The majority of Custom Coaches employees in Adelaide will be made redundant

The majority of Custom Coaches employees in Adelaide will be made redundant in the coming weeks but administrators are hopeful the New South Wales employees will be able to keep their jobs as sale negotiations continue.

Deloitte Restructuring Services Partners Vaughan Strawbridge and Tim Norman were appointed Voluntary Administrators of Custom Coaches Pty Ltd and Custom Coaches (Sales) Pty Ltd On May 30.

The company has about 300 employees and operates from two manufacturing sites – Villawood, Sydney and Royal Park, Adelaide, and a service centre in Brisbane.

Strawbridge says the Deloitte has continued to trade the business while conducting an urgent sale campaign.

"We are in advanced negotiations with a number of interested parties," he says.

"Given the cost structure of the business and current sales volumes, all interested parties have concluded that it would not be financially viable to continue to operate the business from the two sites in South Australia and New South Wales."

All have indicated an interest in retaining Custom Coaches manufacturing operations in NSW but only a service centre in Adelaide.

"As a result, we have taken the decision to wind down the manufacturing operations in Royal Park in Adelaide," says Strawbridge.

"This has been a difficult decision, but it is clearly necessary given the current situation."

The gradual winding down will involve completing the all vehicles currently on the production line over the next six to eight weeks.

The closure of the site will result in the majority of the current 75 employees in Adelaide being made redundant over the next eight weeks – as affected employees have been advised.

Custom Coaches NSW operations in Villawood, which employ 149 people, will continue to trade as normal while the sale process is progressed and finalised.

"We believe this will deliver the best outcome for creditors and ensure as many jobs as possible are retained," says Strawbridge.

"The ultimate likely recovery for creditors is unknown at this time."

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