Rivet founder Mark Rowsthorn left with empty pockets after collapse

Rivet Mining Services founder Mark Rowsthorn, who poured more than $30 million into the logistics group, is likely to have had his investments wiped out after the company's lender put the parent company into administration.

RMS emerged out of the ashes of former transport group McAleese, which was also run by Mr Rowsthorn but collapsed in 2017.

Mr Rowsthorn is the majority owner of RMS parent Blondie Trading, a holding company with more than a dozen subsidiaries. They include RMS, which provides bulk haulage services from mines to ports in Western Australia, as well as Rivet Energy, Rivet Energy Aviation, Sunshine Refuellers, SMS Rental and SMS Innovating Mining.

Rivet founder Mark Rowsthorn has had more than $30 million of investment wiped out after the company's parent group went into administration. Cole Bennetts

Both Blondie and RMS were put into administration on March 22 by Varde Partners, a distressed debt specialist that refinanced the company in 2021 with plans to try to create a diversified mining services and mining group.

But Rivet was struggling with losses caused by project delays, labour shortages and rising costs, and was declared insolvent despite attempts to restructure the company.

Varde hired EY to review the company's business six months before administrators were appointed, including "issues to be considered" if it went into voluntary administration.

FTI Consulting was appointed receivers on March 22 and EY appointed administrators.

While most of Blondie's subsidiaries have continued trading, FTI said at the time that it was also necessary to put Blondie into receivership to "take control of the group at a holding company level to ensure it is sufficiently capitalised and not adversely impacted by the insolvency of the RMS business".

The administration of Blondie is likely to make Mr Rowsthorn's equity holdings worthless, given the company owes hundreds of millions of dollars to creditors. Mr Rowsthorn declined to comment.

Blondie owes creditors $412 million, according to a report on company activities and property filed by EY this month with the Australian Securities and Investments Commission and signed by Mr Rowsthorn.

The total includes $333 million owned to nominee group Global Loan Agency Services, which is understood to represent Varde, and is secured by company assets, such as its vehicles.

FTI said in March that it would try to sell RMS as a going concern. But it declined to comment on Thursday on the value of Blondie and RMS and whether it was making any progress with the sale of the company or its assets.

EY's filings with ASIC have withheld details of Blondie's assets and their realisable value.

A review of Blondie undertaken by KPMG during the COVID-19 pandemic in early 2021, which has been seen by The Australian Financial Review, found that most of the company's revenues were derived from contracts lasting between one and five years that depended on the continuation of mining projects that could be terminated at short notice.

At the time, the company's revenues were slowing due to project delays and debts being incurred as some customers, such as gold miner Coolgardie Minerals and lithium miner Bald Hill, went into administration, forcing at least $15 million of debt to be written off.

While KPMG identified a pipeline of almost $960 million in potential revenue, it warned that securing more contracts would require additional capital spending and labour, which was hard to secure during the pandemic due to WA's border closures.

Rivet's financial problems were compounded by its stake in WA gold miner Kirkalocka, which was acquired in 2019. The mine was the key asset in a company named Adaman Resources.

Adaman had disputes with its shareholders and suppliers due to operational issues at the gold mine, including poor quality ore which caused losses and delayed payments for services provided by Rivet. Adaman went into administration in May 2021.

Follow the topics, people and companies that matter to you.

Fetching latest articles