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VAC Group Holdings Pty Ltd (Administrators Appointed) and associated entities (collectively, the VAC Group)

First Meetings of Creditors28 November 2019

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Opening

Meeting formalities

Purpose of meetings

Declaration of Independence, Relevant Relationships and Indemnities (DIRRI)

Role of the Voluntary Administrators

Voluntary Administration timeline

Vac Group

Background

Corporate structure

Creditor claims

Agenda

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Update of Voluntary Administration

Administrators’ actions since appointment

Sale and recapitalisation strategy

Creditors

Employees

Strategy going forward

Questions

Resolutions

Replacement of Voluntary Administrators (if required)

Committee of Inspection

Agenda (cont.)

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1. Vac Group Holdings Pty Ltd

2. Beacos Pty Ltd in its own capacity and as trustee of the Beacos Trust

3. Rebirthed Earth Pty Ltd

4. Soil Transfer Pty Ltd

5. Staking U Asia Pacific Campus Pty Ltd

6. Vac Group Employees Pty Ltd

7. Vac Group Operations Pty Ltd

8. Vac-U-Dig Pty Ltd

9. Vac-U-Digga Pty Ltd in its own capacity and as trustee of Vac-U-Digga Trust

10. Vac-U-Digga R & D Pty Ltd

11. VHS IP Pty Ltd

12. Earth Radar Group Pty Ltd

13. Earth Radar Pty Ltd

14. Cosbea Pty Ltd in its own capacity and as trustee of Cosbea Unit Trust

Meetings being held

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The Administrators applied to the Supreme Court of Queensland for certain orders to allow for the orderly and efficient conduct of the Vac Group Administration.

On 22 November 2019, the Supreme Court of Queensland ordered that:

– The Voluntary Administrators:

＞ may hold the first meetings of creditors for the Vac Group concurrently; and

＞ may admit all proofs of debt received by any creditor of the Vac Group for purposes of voting so that creditors are only required to vote once in respect of any resolution put to the meeting.

– Any advances made under the loan facility provided to the Voluntary Administrators and any other liabilities incurred or accrued under or in support of the loan facility – including fees, guarantees, indemnities, security, borrowing costs and interest – are liabilities incurred by the Voluntary Administrators in the performance and exercise of their functions and powers as voluntary administrators of the Vac Group (Liabilities);

– if the indemnity in respect of the Liabilities is insufficient to meet such liabilities, the Voluntary Administrators will not be personally liable to repay the liabilities to the extent of insufficiency.

A copy of the Order is tabled at this meeting.

A copy of the Order will be sent to creditors following this meeting by post or email.

Order of the Supreme Court of Queensland

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1. Vac Group Holdings Pty Ltd

2. Beacos Pty Ltd in its own capacity and as trustee of the Beacos Trust

3. Rebirthed Earth Pty Ltd

4. Soil Transfer Pty Ltd

5. Staking U Asia Pacific Campus Pty Ltd

6. Vac Group Employees Pty Ltd

7. Vac Group Operations Pty Ltd

8. Vac-U-Dig Pty Ltd

9. Vac-U-Digga Pty Ltd in its own capacity and as trustee of Vac-U-Digga Trust

10. Vac-U-Digga R & D Pty Ltd

11. VHS IP Pty Ltd

12. Earth Radar Group Pty Ltd

13. Earth Radar Pty Ltd

14. Cosbea Pty Ltd in its own capacity and as trustee of Cosbea Unit Trust

Meetings being held concurrently

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Quorum: Insolvency Practice Rules 75-105

Attendance register

Voting (on the voices and using voting slips)

Time and place convenient: Insolvency Practice Rules 75-30

Proofs of debt and proxies

Meeting formalities

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First meeting of creditors

Convened under Section 436E of the Corporations Act to:

– determine whether to appoint a Committee of Inspection and, if so, who are to be the Committee members; and

– consider the removal of the Administrators and appoint an alternative Administrator who has consented to act

These meetings have no authority to consider any other business

Second meeting of creditors

To be convened on or around 19 December 2019

Creditors will vote on the future course of action for Vac Group

Purpose of meetings

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DIRRI

DIRRI dated 21 November 2018 – a copy was distributed with the initial information to creditors

DIRRI is tabled and is available for inspection at this meeting

Our assessment identified no real or potential risks to our independence

Remuneration

Schedule of rates provided with meeting information

Comprehensive remuneration report will be prepared prior to seeking approval of fees

Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) and remuneration

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Voluntary Administrators:

Appointed by directors of Vac Group and represent the interests of all stakeholders

The directors’ powers are immediately suspended and the Voluntary Administrators are in control of the assets

The Administrators are responsible for the ongoing trading of the business

Our responsibilities include:

Holding meetings of creditors;

Investigating the reasons for failure of the business;

Preparing a comprehensive report to creditors; and

Making recommendations to the creditors about the future of the companies.

Role of the Voluntary Administrators

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Voluntary Administration timeline

Appointment Within 25 business days

21 November 2019

Written notice of first meetings e-mailed or mailed to creditors and employees

28 November 2019

1st meetings of creditors held

Purpose:

(i) Consider the replacement of the VA

(ii) Consider the appointment of a Committee of Inspection

12 December 2019

Written notice of second meetings mailed to creditors and employees

19 December 2019 (approx.)

2nd meetings of creditors held

Options:

- DOCA

- Liquidation

- Return to directors

18 November 2019

Administrators take control of company and its assets

12 December 2019

Administrators Report issued with recommendations

Within 20 business daysWithin 8 business days

ADMI

NIST

RATI

ON

Today’s meetings

THE VAC GROUP

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The Vac Group commenced in 2000

The services provided by Vac Group include excavation of materials using non-destructive vacuum hydro-excavation services, associated waste recovery, transportation, treatment, disposal and/or recycling services. Vacuum excavation services include:

– Excavation of existing pits;

– Excavation of new ground for pits;

– Trenching and potholing for services;

– Pump out of waste materials; and

– Waste transport and disposal.

Vac Group has also developed a range of technologies to allow Vac Group to locate and map underground services, such as water, telephone, fibre-optic and other services, utilising electro-magnetic induction and high resolution ground penetrating radar.

Vac Group has a range of mobile plant and equipment in operation throughout Australia. This includes:

– Truck-mounted vacuum excavation units;

– Hook lift vacuum excavation unit and skip bin units;

– Tipper trucks and trailers;

– Various light vehicles;

– Road profile (surveying units); and

– Other specialised equipment

Background

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Corporate structure

Source: Corporate structure provided by Management and ASIC company searches

Vac-U-Digga Pty Ltd (atf)

Rebirthed Earth Pty Ltd

Vac-U-DiggaR&D Pty Ltd

Staking U Pacific Asia Campus Pty

Ltd

VAC Group Employees Pty

Ltd

Vac-U-Digga Trust

Beacos Trust

VAC Group Operations Pty

Ltd

Beacos Pty Ltd(atf)

Earth Radar Group Pty Ltd

100% 47%

100% in all entities

New Zealand OperationsEarth Radar

Related party

Jaya Management Pty Ltd (6%)B Reeves Family Pty Ltd (35%)John Raymond Reeves (12%)

53%

VAC Group Holdings Pty Ltd

100%

Australian Operations (referred to as Vac Ops)

Beacos NZ Limited

Vac-U-Digga NZ Limited

Soil Transfer Pty Ltd

Cosbea Pty Ltd `

VacTel NZ Limited

Cosbea Unit Trust

Earth Radar Pty Ltd

NOT SUBJECT TO APPOINTMENT

VHS IP Pty Ltd

Vac-U-Dig Pty Ltd

Neil Costello (33.33%)Benjamin Costello (33.33%)

Sofia Salvatore (33.33%)Related party

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Creditors are entitled to lodge claims with the Administrators for monies owed

It is too early to form conclusive views on the potential return to unsecured creditors

The order in which different classes of creditors are paid is determined by the Corporations Act 2001

Generally, the order of priority is as follows:

– Employees (priority from certain categories of assets)

– Secured creditors

– Unsecured creditors

Creditor claims

Category Estimated number Estimated value ($’000)

Employees 245 4,417

Secured & PPSR creditors 56 22,342

Unsecured creditors 276 4,248

Total 577 31,007

UPDATE OF VOLUNTARY ADMINISTRATION

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Worked to stabilise the operations

Briefed employees across all major locations

Paid wages to employees

Opened accounts with key suppliers

Commenced a sale and recapitalisation campaign

Engaged in discussions with secured creditors for continued support

Arranged for new working capital facility

Engaged valuers to prepare valuations of:

– Plant and equipment

– Real properties

Commenced investigations into Vac Group’s affairs

Assessed Workplace Health and Safety

Prepared a trading forecast for the voluntary administration period

Attended to statutory notification obligations

Convened for the first meetings of creditors

Key actions taken since appointment

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Administrators are seeking expressions of interest in Vac Group

Expressions may include recapitalisation or acquisition of Vac Group

Advertisements featured in national newspapers on 19 November 2019

Non-binding expressions of interest close on 2 December 2019

A number of parties have expressed initial interest

A range of information has been made available to interested parties

Further information will be provided in the Report to Creditors

Sale strategy

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The Vac Group has approximately 262 employees

The Administrators are responsible for all wages and entitlements during administration

Pre-administration Employee entitlements:

– Employees are entitled to register claims

– Claims are afforded a priority under s556 of the Corporations Act

Employees

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The Voluntary Administrators will:

– continue to assess ongoing operations;

– continue the sale and recapitalisation process;

– complete our investigations into Vac Group’s affairs;

– prepare and issue the Report to Creditors by 12 December 2019 (including recommendation on Vac Group’s future); and

– convene a second meeting of creditors for 19 December 2019.

Next steps

Q & A

FIRST MEETING RESOLUTIONS

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Section 436E(4) of the Corporations Act 2001 allows creditors to appoint alternative Voluntary Administrators if they so choose

Prior to the meetings today, I have not been made aware of any alternative Voluntary Administrators having been nominated or consenting to act

If there are no alternative Voluntary Administrators nominated to replace Rob Kirman and myself, there will be no resolution put to creditors on this matter

Replacement of the Voluntary Administrators

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Role is to represent creditors

Has capacity to grant the Voluntary Administrators permission to undertake certain actions

Creditors may determine whether there is to be a committee of inspection

The purpose and powers of a committee of inspection are to:

– advise and assist the Voluntary Administrators;

– give directions to the Voluntary Administrators; and

– monitor the conduct of the Voluntary Administration.

Pursuant to the Order of the Supreme Court of Queensland dated 22 November 2019, if a Committee of Inspection is formed:

– a single Committee of Inspection will represent creditors of all entities within Vac Group; and

– will be limited to a maximum of 10 members.

Committee of Inspection

The Administrators do not recommend a Committee of Inspection be formed for the Vac Group of Companies for reasons disclosed in our initial notification to creditors

dated 21 November 2019