Administrators have been called in for Scott’s Refrigerated Logistics, the country’s biggest integrated cold-storage logistics group.
Operating a massive fleet of over 600 prime movers and rigids, the firm provides refrigerated trucks and warehouses for businesses including supermarket giants Coles, IGA and Aldi.
It also has sizeable share of cold storage in Australia, a sector worth around $1.2 billion.
The business posted $542.9 million in consolidated revenue for the 16 months ending June 2021.
Spiking fuel costs, flood events, labour shortages and the hangover effects of COVID-19 on industry proved too big an obstacle for the business as it tried to overcome reported losses of $7.3 million.
In an effort to shed the debt-heavy logistics business, former parent Eagers Automotive sold Scott’s to private equity firm Anchorage Capital Partners in June 2020 for nearly $75 million.
A $70 million asset-backed funding facility secured via investment firm Gordon Brothers to assist Anchorage has failed to help turnaround the business.
KordaMentha has been appointed as receivers and is now looking for a new long-term owner.
“We anticipate a high level of interest in this business and its assets, given its significance in the cold chain supply system in Australia,” KordaMentha partner Scott Langdon said.
“We are seeking support from all customers to give the business the best chance of being sold to a new long-term owner.”
Toll Holdings and Lindsay Australia are both understood to have held talks for a potential acquisition of the company.
It has been reported that Coles will pay some drivers salaries in the interim.
Scott’s will continue to deliver food to supermarkets for the time being.
In July last year the company appointed a new Chief Executive Officer.