A decision by US company, APR Energy, not to register four gas turbines leased to Forge Group on the Personal Properties Security Register (PPSR) could potentially cost them $50 million.
Mining services firm Forge Group was placed into receivership in February 2014. At that time they were leasing four gas turbines from APR Energy. Under the laws governing external administrations, all assets not registered under the Personal Properties Security Act (PPSA) can vest with the lessee – in this case, Forge Group.
As reported by The Age, the receivers of Forge Group are taking this matter to the Supreme Court of New South Wales in an attempt to gain control of the turbines from APR Energy. If successful, $50 million worth of assets could be made available to the creditors of Forge Group, in what will be the largest case under the PPSA since its inception in 2012.
Given the relatively insignificant cost of only $16 to register assets under the PPSA (excluding any legal fees if required in the transaction), this oversight could be a major and costly error for APR Energy, and this matter again highlights the importance of correctly registering assets on the PPSR.
Why you should register your assets on the PPSR
If you provide finance, supply, lease, hire or loan assets to third parties, we strongly recommend you obtain appropriate advice and register your ‘security’ interest in the assets to protect your position. Failing to properly register may result in the loss of your assets in the event of insolvency.
If you would like more advice on how SV Partners can assist you with registering your security interests or any advice on PPSR matters, please contact one of our expert advisors on 1800 246 801.