General News
6 November, 2024
New government considering support for Mount Isa Rodeo
Administrator SV Partners is working with the state government to secure a support package for the event.
Could David Crisafulli’s new state government be the saviour of the Mount Isa Rodeo?
The company tasked to save the event certainly hopes so.
As SV Partners prepares to put options together for the long list of Isa Rodeo Ltd’s creditors, there is hope that the new LNP leadership will come up with the goods to provide a short-to-long-term fix for one of Queensland’s iconic events.
Administrator Michael Brennan told last week’s creditors meeting that SV Partners had been “liaising with our contacts in government” and that he was hopeful of having the government "lift the load that was commensurate with the benefit the state gets" from the rodeo.
Before the election, Tourism Minister Michael Healy rejected a $500,000 bailout request from Isa Rodeo Ltd, however indicated to North West Weekly that support could be an option if there was a change of rodeo leadership.
With the CEO Natalie Flecker made redundant and the board willing to step down, SV Partners will be hoping to lean on new Tourism Minister Andrew Powell, who was sworn in last week.
A change of director-general could also work in favour of the Mount Isa Rodeo – local product Trish O’Callaghan from Tourism and Events Queensland was last week named the director-general of the Department of the Environment, Tourism and Science.
A seat on the board could also be the carrot needed to entice the new Crisafulli government to raise the state’s support level for the rodeo.
As SV Partners puts together a plan for creditors, the voluntary administrator says its preferred board structure involves a mixture of community members and delegates from Isa Rodeo Ltd’s three major stakeholders.
In the document Expressions of Interest for Mount Isa Rodeo it states: “The existing board members will be stepping down from their roles and SV Partners are calling for suitably qualified people to fill a board role as a representative of the Mount Isa community.
“The suggested new board structure is as follows:
Five community representatives;
One representative from the Mount Isa City Council;
One representative appointed by the Minister for Tourism; and
One representative appointed by the naming rights sponsor.
“Subject to the approval of creditors, the constitution of the company will be amended to embed the above structure, the requirement for a rolling director renewal process, and independent appointment committee for future director appointments," the document read.
While this appears to be the preferred plan of SV Partners, the decision will ultimately be made by the creditors.
The voluntary administrator has until November 15 to come up with a plan to save the rodeo and get creditors paid in a reasonable timeframe.
If it can’t come up with a path forward, it faces the risk that those who are owed money will vote to liquidate the company and receive cents on the dollar.
SV Partners director Michael Brennan said he was hoping the new LNP state government would come to the rodeo’s rescue.
“It’s a critical pathway,” he told North West Weekly.
“We have been engaging with the new state government and that’s certainly ramped up since the announcement of the ministry.
"I’ve spoken to and I’ve reached out to (Premier) David Crisafulli, (Tourism Minister) Andrew Powell and (Tourism and Events Queensland CEO) Patricia O’Callaghan.
“We’ve also been engaging with Mayor Peta MacRae and Robbie Katter, so I’m really hopeful there will be a strong commitment from all of the levels of government to support the event and the communities of the North West.”
Mr Brennan said the Mount Isa Rodeo was too valuable to the state and region to disappear.
“At the end of the day, the creditors each year underwrote the event where the majority of the benefit went to the community,” he said.
“So this is an event that directly provided $7 million in economic benefit to Mount Isa and $20 million in benefit to the state.
“It’s really time for the community representatives, which is effectively the government, to take a bigger financial stake in this enterprise because ultimately there’s a number of different communities when you break it down that benefit from this.”
Asked if the promotion of Ms O’Callaghan would work in the rodeo’s favour, Mr Brennan had a quick response.
“How could it not? Look, Patricia O’Callaghan is a consummate professional in this space,” he said.
“She’s reached out, we’ve been in contact with her ... she’s transitioning between both roles at the moment and we’re keeping her up to speed.
“We’ve sent a copy of our expression of interest (document) to the department and we know that the government understands how vital this is to the region.”
Mr Brennan said he hoped that a decision from the government could be made before he sends a report to creditors by November 15.
Those owed money will then have a further 10 days to consider a decision, with a creditors meeting scheduled for November 25.
“Look, it’s a big ask but we’re working on that,” he said.
“The report will have two elements. One will be the investigation and our opinion on the financial affairs of the company, which is a vital part of it, and the second will be the proposed move forward.
“We will at least have the investigation completed and we’ll be able to report back to creditors on our findings there but it’s more about moving forward and the positive steps that can be taken and I think there’s certainly a lot happening in that space now as well.”
CREDITORS GATHER
The first creditors meeting was held in Mount Isa last Thursday, although many joined via video conference.
North West Weekly can reveal that creditors were told that Isa Rodeo Ltd has around $1.9 million in liabilities and just over $1 million in the bank, leaving a shortfall of around $900,000. That figure will rise when additional costs are factored in.
“I think it was really positive and helpful for creditors,” Mr Brennan said of the meeting.
“The main focus of that meeting and I guess the entire voluntary administration process is to start getting creditors answers to the questions that they’ve had for some time.
“And there was a definite flow of information both ways.”
Creditors were informed that both remaining Isa Rodeo Ltd staff members were coming off the books.
One had resigned, while CEO Natalie Flecker was in the process of being made redundant.
Mr Brennan confirmed that SV Partners had engaged legal advice to ensure that it was done by the book because Ms Flecker was operating under a contract and was not a typical full-time employee.
Those hoping to see accountability for the demise of the rodeo could end up disappointed.
In the meeting, Mr Brennan said it was unlikely that SV Partners would conduct a thorough investigation into the rodeo's affairs because there had been no obvious signs of fraud and the priority was to deliver a return to creditors.
A forensic audit would only take place if the creditors voted to liquidate the company.
Should the creditors go down the preferred path of SV Partners, six local people would be appointed to the board.
“One of the benefits of the voluntary administration process is that the administrators can change the existing constitution of the company so that the board structure and the management that’s embedded in the constitution can be changed without requiring the members' input,” Mr Brennan said.
“That’s something that we’re looking at the moment as to how we can provide certainty for the community by embedding a local element, ensuring that there is a continuation of the local connection so that there is some certainty in that space.”
Mr Brennan told North West Weekly that while the first six board members would likely be appointed under the EOI process, he would like to see the new board generate a process for member or community-elected positions as a pathway forward.
Also at the creditors meeting, an eight-person Committee of Inspection was formed, which is the conduit between the voluntary administrator and the creditors in the period between meetings.
The eight people selected to join the committee were: Brian Atherinos, Beau Thomas, Sonja Wessels, Peter Gogsch, Jason Holmes, Glen Ashmore, Andrew McCarthy and Shayne Watts.