Death of an icon - Riviera sale likely

6 July 2009,

The spectacular $350 million sinking of luxury boat builder Riviera in May this year resulted in hundreds of lost jobs. The compnay has also dropped its GB and Princess brands.

The receiver Chris Campbell (Deloittes), who is still conducting a review of the company, has not ruled out further job losses. Already its workforce has been slashed from 1200 to 400 in the past year. Workers last week declined an offer of a five-year wage freeze. So where to from here? Gold Coast Business News shines some light on the situation.

What was the first priority of the receivers and managers?
To turn the supply chain back on, reassure employees and customers of the intention to continue to trade and to reassure customers that the network of Australia’s largest luxury boat building company is still up and running.

Has this been achieved?
No, although sales of a round $200 million were achieved at the Sanctuary Cove International Boat Show.

Has the business been sold?
Expressions of interest have been received. However given the current economic climate, it is likely that the best return to creditors is likely to come from a restructure and turn-around of the operations of the business rather than an immediate sale.

What brought about the appointment of the receivers?
The appointment of receivers followed a request from the directors that an appointment be made. Riviera has been significantly impacted by a high level of debt, as well as the current economic climate.

“The company has seen a downturn in demand for its boats over the last six to twelve months which appears to be in line with the global luxury boat industry. However, there remains a solid pipeline of demand for these best-in-class Riviera products,” says receiver Chris Campbell.

How many staff will be affected?
The company currently has around 400 employees after a further 150 were sacked last month. More can expect to lose their jobs under the restructuring process.






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