The collapse of Gold Coast bulk fuel supply company Mega Ltd has left an $843,000 shortfall in the funding tank for racing teams it sponsored.
Yatala-based Mega burst on to the scene in 2017 to become a major sponsor of Supercars, Super2 Series, Australian GT, Motocross, drag racing and super boats teams.
Teams that carried the Mega brand name included Liam Talbot Racing and Walkinshaw Andretti United (WAU) V8 Supercars team, which counts supercars champion James Courtney as a driver.
When the Mega Rocklea fuel outlet opened in July, Mr Courtney was there to join the celebrations.
In a report to creditors on September 16, administrator Simon Cathro, of Worrells, wrote Mega invested heavily in its brand by sponsoring racing teams across different sports.
Racing teams listed as creditors to the Mega group comprise Liam Talbot Racing ($220,000), G & W Racing Pty Ltd ($137,500), Tickford Racing ($90,000) and WAU Racing Pty Ltd ($396,000). As unsecured creditors they are unlikely to see any money owed returned as the bulk of the funds is expected to go to secured creditors and Mega financiers Nora Goodridge and Scottish Pacific.
Mr Courtney did not return calls from the Bulletin yesterday while spokesmen for Tickford Racing, Liam Talbot Racing and G & W Racing declined to comment.
WAU issued a statement last month confirming it had terminated Mega as co-naming rights sponsor and stating it was seeking a new sponsor for the rest of the 2019 Virgin Australia Supercars Championship.
Former V8 Supercars driver and 2005 champion Russell Ingall, commenting generally, said any loss of sponsorship had a “massive impact” on racing teams as it was a tough climate to raise funds.
“Racing teams plan their spending around sponsorship they will receive for the following year,” he said.
“Supercar teams need $2.5 million per car and they spend money on research, equipment and wages in anticipation of receiving those sponsorship funds.
“If all of a sudden that money doesn’t turn up it has a massive impact.”
Mega Ltd specialised in the supply and storage of bulk diesel fuel for the heavy transport, civil construction, marine and agricultural industries.
It also had ambitions in the retail sector, planning to bring more competition by acquiring service stations and using its low overheads to feed into lower prices at the bowser.
At its peak the company operated a fleet of 50 trucks, including road trains, and more than 200 large-scale bulk fuel tanks. It also has fuel retail stores and unmanned tanks across the country, mostly on the East Coast.
Administrators and receivers were appointed to Mega Ltd and 10 associated companies, including Mega NQ Pty Ltd, which traded as Carpentaria Fuels and Richmond Roadhouse, and Graycog Pty Ltd, which traded as Diesel Express, on August 30.
Mr Cathro wrote in his September 16 report that former Mega Ltd director Corey Brown failed to provide any reason for the failure of the Mega group or any details of the assets or liabilities.
However, Mr Cathro said, it was his opinion the reasons for the failure were continued trading losses, poorly maintained books and records and rapid growth without due diligence or budgeting.
Mr Cathro wrote that, based on his preliminary investigations, Mega paid too much for the businesses it acquired.
Mega Group was bankrolled by Nora Goodridge ($44.8 million) and Scottish Pacific ($20.39 million), which are owed collectively more than $64 million.
A second creditors’ meeting was held on September 25 during which the meeting was adjourned to a later date for eight companies including Mega Ltd and Mega Fuelco.
extracted from Gold Coast Bulletin