From humble beginnings, the rise and fall of HHA
HEAVY Haulage Australia was an iconic Australian business, famous the world over thanks to the reality TV show Mega Truckers.
Started by the Jon Kelly back in 1999 when he was 19 years old, the business had its ups and downs but grew rapidly from about 2004 to 2010.
Kelly said his family was in transport, his he grew up with a love of trucks.
In 2000 Kelly was $1million in debt then a year later records show he was bankrupt.
Six years on, after some hard work he managed to pay back is creditors in full.
He was known for having the best gear and doing the biggest jobs and his YouTube site showing off his tricked out trucks caught the attention of TV executives in 2011.
In 2012 the A&E Channel filmed a one off Mega Truckers special. The show turned out to be popular.
While the drama of running HHA was captured on-screen the one-off show was criticised when Kelly in the heat of the moment threatened to burn one of his workers' houses down during filming; which Kelly later said was a running joke at HHA.
No matter what people thought of Kelly, they couldn't stop watching and that one off special led to MegaTruckers the series and fans all around the world.
In 2013 Kelly announced HHA had made $4.5million in profit and the businesses announced a sponsorship deal with Tim Slade and Erebus Motorsport in the V8s.
Then in January 2014 year he announced a $55million investment in gear ordering 40 new Mack Trucks and banking on the energy and infrastructure market and estimating an $80million turnover.
That year he also sponsored Walkinshaw Racing.
At the height of the business he had 36 impressive trucks and more than 100 employees. The business was worth $60 million dollars and had offices Brisbane, Toowoomba, Port Hedland, Perth and Darwin.
In July 2014 HHA consolidated all its individual entities into one operating entity namely HHA save for its fleet ownership and tenanted premises.
In November 2014 Kelly did a deal with McAleese where they purchased a 50% stake in HHA for $3million which was put back into HHA.
McAleese finanace also invested $4million as part of the deal. The $7 million was to stabilise the business and used as working capital as well as to help repay a $5million ATO debt.
In court documents viewed by Big Rigs, Kelly said after the McAleese acquisition he was there initially to be managing director and assume his normal role until there was a change in management structure.
After the McAleese deal Kelly's businesses which weren't consolidated secured a cross collateral security debt to Wespac and GE Comercial.
Things started turning for the worse after the deal went through.
When liquidators probed Kelly in court in February he said following a meeting with Mark Rowsthorn he was "sin binned" to WA.
"Mark Rowsthorn and I had a meeting. Mark gave me an ultimatum and said the people don't like my management style, the way I was conducting things, and he gave me three options: option 1 was termination immediately; option 2 was suspension for 12 months with pay; and option 3 was, I had to come up with option 3, and I moved over to WA pretty much in December."
Mr Kelly said he was then in charge of the major projects in WA.
"We were lacking a bit of management depth over there, so I took the management role from an operations perspective in WA and basically carried out all the really big moves we did. We did some record breaking moves and probably 80, 90% of our revenue was coming from the west."
Then only seven months after the McAleese acquisition it all came crashing down.
On June 29 HHA along with Texas T, was placed into administration and Kelly was made redundant.
Then on July 1 Heavy Haulage Australia NT, HHA Oil and Gas Services, Custom Truck, HHA AirMarine, Roadhammer and JFK Project Solutions were placed into administration.
Administrators then advertised the business for sale.
Six non-binding offers were received, three were short listed and two were considered insufficient by administrators.
On July 10 the final party notified administrators they would not make a binding offer and withdrew.
Also on July 10 administrators commenced the controlled closure of HHA.
Each company was placed into liquidation and Heavy Haulage Australia's 120 staff were looking for new jobs and the 55 prime movers, cranes and 120 trailers were being sold off by liquidators.
Administrators reported after the collapse that Kelly's business Roadhammer was the 50% shareholder in HHA with McAleese and also owned two properties one in Larapinta and one in Toowoomba.
Kelly's other business JFK Project Solutions owned a number of small fleet assets.
Administrators reported HHA owed $77.6million including $7.4 million to unsecured creditors, $38.7million to fleet financiers, $13.9million to McAleese finance, $12.9million to committed capital expenditure, $1.7million to employees and $2.6million to statutory liabilities.
The administrators put the Group's failure down to the downturn in the resources sector and a sharp decrease in revenue.
Big Rigs has learnt that since HHA collapsed Kelly had been employed by Toll Transport Group earning about $25,000 a month contracting as a consultant.
He told the Victorian Supreme Court earlier this year that he mainly did quotes and business development operations.
Court documents show Kelly said his income as director of HHA Group after McAleese took over was $410,000 per year.
Kelly told the court the house he owns with his wife in Brisbane was listed on the market for $2.95 million but they still owed the bank about $1.6million for that property.