Wax Convertor Textiles goes into liquidation

The company produced defence and camouflage fabrics, awning and sun blind fabrics, horse rug fabrics, architectural fabrics, transport PVC, caravan annex fabrics and artistic canvases.

WCT was founded by Jim Kelman in December 1991 and the current CEO and director James Kelman had been working in the business for almost 30 years. 

Administrators were appointed on 26 August and had sought to sell the company as a going concern or via a deed of company arrangement. 

The company experienced a sharp fall in revenue from $18 million in the 12 months to 1 July 2023, falling 22 per cent to $14 million in the 12 months to 1 July 2024.

In a media announcement in early September, Jim Kelman blamed the drop in revenue on government delays to its Future ADF Clothing Systems. 

“For the six years prior to March 2021 – the company manufactured to the requirements of 40,000 metres per month for Australian combat uniforms valued at $600,000 per month when, without notice, we were instructed to cease operations. Defence were overstocked,” Kelman said in the release. 

“The supply chain is seven months from yarn ordered, to camouflage fabric produced, to payment received.”

“With the Australian Government failing to deliver on the projected commencement date of April to June quarter 2023 – later revised to September to December 2023 – to then March 2024 and now possibly September 2024 – WCT has been living off small trickle orders in the past nine months.”

“Meantime an untenable $20,000,000 has been removed from our cash flow since March 2021 and still there is nothing firm or long-term to shop to our banking partners.”

In a report to creditors, dated 11 September 2024, administrator Salea Advisory said it was unable to obtain any formal confirmation from the Defence Force as to future ordering or contract commitments moving forward. 

The report also uncovered the size of the liabilities held by the company, with $28 million owing to a mix of secured and unsecured creditors. Judo Bank and Moneytech, the two secured creditors are owed over $17 million, Priority Creditors made up of employees is owed $1.4 million in entitlements and Unsecured Creditors $9.4 million, of which $4.4 million is owed to trade creditors and $970,910.16 to the Australian Taxation Office. 

Expressions of interest were sought for the company’s business and assets, with 10 parties enquiring, four signing a confidentiality deed and making a deposit for further information and two taking a site tour. One offer was made for the plant and equipment, however the sale of this was eventually put up for auction via Slattery Auctions & Valuations by EOI (expression of interet) with a closing date of 15 of November. 

Entire printing and dying lines, warping and weaving lines and finishing lines are being sold off with all items to be paid for and collected by 17 November 2024.