Rebuilding the Business 1986 - 1994 - Abigroup

Holding it
together
DARRELL HENDRY 1984 - 2005
FORMER CHIEF FINANCIAL OFFICER
Darrell Hendry joined Abigroup in 1984. Back then the business was still known as
Abignano Limited and it was a turbulent, whirlpool kind of a time to start. ‘I was a
Chartered Accountant working in the audit division of KPMG, but I was keen to move into
a commercial role. Abignano Limited was looking to fill a new finance role in its Head
Office, created to manage the financial affairs of a group of businesses recently acquired
from Enacon Limited. The Enacon businesses included a large variety of operations, and
each business had its own management team and was run as a separate unit. One of
Enacon’s major investors, Lee Ming Tee, had structured the deal with Jim Abignano on
the basis that Abignano Limited would acquire the Enacon businesses partly for cash and
the balance by Abignano issuing additional shares.’
The reasoning behind the decision to acquire the Enacon group was strategic – to
move Abignano away from a total reliance on core civil engineering projects to a
more diversified mix of businesses. It made sense on paper, but the reality was not as
straightforward. ‘It’s fair to say that the integration process did not go smoothly and it
didn’t take too long for everyone to realise that a number of Enacon’s businesses were
bleeding cash terribly – the worst of which was the Graham Evans building group. I was
six months into the new role when I was asked to become the CFO of that business, with
the brief to put structure into its financial and administration reporting and processes.
Graham Evans Victoria had senior management problems, the Queensland company was
suffering losses from the construction of high-rise residential towers on the Gold Coast
and in NSW there were major union problems particularly with the construction of a new
Sydney Police Headquarters in the CBD.’
As the scale of the commercial problems in the Enacon business grew, so too did the
animosity between Jim Abignano and Lee Ming Tee. ‘In 1985 as the story goes, Jim
went back to Lee Ming Tee and advised him that the acquisitions were performing so
poorly that he intended to sue Enacon for breach of contract. It was a very messy
period for the company as we did not only have to deal with many operational problems
in the businesses but we were also attempting to manage the haemorrhaging cash
situation. Litigation also commenced between Abignano Limited and one of its major
shareholders. The string of events could easily have resulted in Abignano’s total demise,
however Enacon purchased Jim’s personal investment in Abignano Limited. The deal
was completed in late 1985, and in early 1986 Jim and [MD] Alan Livingstone left the
company.’
Whilst the ownership issue had been settled, Abignano still had to deal with all the
operational problems. ‘Abignano needed a leader who could solve the big issues. Clive
Austin, the new Chairman, who was appointed on the departure of Jim Abignano,
approached John Cassidy. John was initially appointed as a consultant to come in and try
to work out what could be done to turn the company around. John and Clive called and
asked me to take over as the CFO of Abignano which they intended to rename Abigroup.
I agreed to stay on and work with John to try and turn the company around.’
‘... with sweaty palms and a great
deal of trepidation we completed
the transaction (a management
buyout) on 30 June 1988.’
REBUILDING THE BUSINESS
DARRELL HENDRY
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