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2 June 2016
TO THE CREDITOR AS ADDRESSED
Dear Sir/Madam
Kent Corporation Pty Ltd(In Liquidation) ACN 071 906 762
Formerly trading as Country Homes WA
(“the Company”)
As you are aware, I act as the Liquidator of the Company, having been appointed by a resolution passed by the creditors of the Company on 8 September 2015pursuant to section 439A of the Corporations Act 2001.
Further to my update circular to creditors dated 16 December 2015, I write to provide creditors with a further update in relation to the Company's sale of assets contract with Ausco Modular Pty Ltd ("Ausco").
Since my appointment, Ausco has undertaken to complete rectification works for existing homes built by the Company, has completed houses that were under construction at the time of the sale agreement and has signed up new customers.
There was initial resistance from a number of existing and potential customers which has now been worked through.
We have been in regular contact with senior management of Ausco who have been very open and provided information regularly regarding the operation of the sale contract.
Creditors may recall that the funds to be paid by Ausco to the Company were tied to a sliding percentage of the gross margin achieved by Ausco on completed works.
After the deduction of approximately $35K in rectification costs, 13 completed jobs have grossed $19K of which the 30% return to the Company is $5.7K for the first quarter of 2016 (please note the quarters are aligned with the calendar year as opposed to the financial year).
The initial return is low, although positive, as Ausco has incurred losses associated with deposits paid by the customers to the Company on several projects.There has been a high degree of professionalism displayed by Ausco in expending funds required to complete the houses to maintain the goodwill, which has benefited both itself and therefore the return to the Company.
There are three current jobs in the work in progress with an estimated gross margin of approximately $128K which will result in a gross approximate payment of $25K to the Company.At this point in time, it is anticipated that the payment relating to the current works in progress following paying back Ausco will be the second quarter to 2016.
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Based on the forecasts provided by Ausco, sales to 31 December 2016 have been budgeted to result in a gross payment of approximately $600K for the Company. The forecast to 31 December 2017 have estimated a further payment to the Company of approximately $300K.
As noted in my previous correspondence with creditors, I will provide creditors with notice of my intention to declare dividends periodically based on the receipt of funds from Ausco.
Overall the outlook is positive and to date, Ausco have adhered to their word to maintain the customer relationships and build on the goodwill of the Company.
Should you have any queries in relation to this matter, please do not hesitate to contact my office.
Yours faithfully
Kim Wallman – Liquidator of
Kent Corporation Pty Ltd(In Liquidation)
ACN 071 906 762