A leading C&I solar company is focused on business as usual having found itself briefly under the ownership of an alleged fraudster.
Bill Papas arrived at the staff barbecue in a Bentley coupe. He’s a car guy. The company he’d bought, Autonomous Energy, is headquartered up in Sydney’s Frenchs Forest, deep into the North Shore. There are some nice runs around that way where a driver can open up, but really you have to get out of town to lay it out.
Papas and a mate had two Audi R8 LMS Evos down in Victoria for that sort of stuff. They were upgrades of models he’d raced at Phillip Island after getting his start in road-registered Porsches. His next step was to compete in the GT category.
That will have to wait.
He’s in Greece at the moment, recovering from a bout of covid-19.
Westpac and two other banks are keen to see him come back to Australia safe and well.
They are pursuing him over $400 million of loans to his company Forum Finance.
Matthew Linney, the CEO of Autonomous Energy, can’t believe he’s somehow caught up in it all.
It all started when Papas decided he wanted to get into clean energy in March this year. “He was looking to buy a solar business,” says Linney. Papas made on offer for 100% of the company, which was accepted by Linney, co-founder Mark Gadd and investors who bought into Autonomous in 2018. And that was that.
“All of us got dragged along in that deal,” says Linney, who, along with Gadd, was made a minor shareholder in the 2018 transaction with Sydney-based investment company Longmoat.
The buyer, iugis investments, was controlled by Papas “although he’s not technically the owner”, Linney says. The common thread between iugis and other companies caught up in the loans dilemma is that Bill Papas was the sole director and company secretary on all of them.
After the purchase in March Autonomous Energy did not receive any money from iugis. “That’s an important point that we made to Westpac; none of the money that is of questionable origin has gone into Autonomous Energy,” Linney says.
But the outgoing shareholders were paid – all apart from Linney, who took the option of shares in iugis or cash at the end of the year.
It’s been a miserable time for Linney for sure, to see so much work and business-building (he co-founded Autonomous 15 years ago) diluted to nothing by a V10 race-car-driving “serial entrepreneur”.
Gadd, who was a director of the business and on the board, had not been an employee for a few years. “He decided to take some leave after the other investors came in [in 2018].”
Commercial solar is a tough line, Linney says, and Gadd felt like a break. And that’s all he wants to say on that topic.
The fog clears
To be caught up the affairs of Bill Papas, who appears to have fled the country to Greece possibly to avoid the attention of banks from whom he borrowed hundreds of millions of dollars, is a grim prospect for the remaining original founder of a company dedicated to hooking business up to clean energy.
“It’s an unfolding situation where we don’t have all the information and things are changing; the main thing has been communication with our clients and staff,” Linney says. “Even if we don’t know everything.”
The response has been encouraging. In fact, it almost feels like a fresh slate. Clients have been “really understanding”, whether they are in line for projects or have long-term service agreements. The voluntary administration process has taken in many companies – a web of connected entities, as Linney calls it, “and we are quite a separate business on the side – we were never integrated [into iugis].”
Wages are being paid to Autonomous’ 24 staff (mostly based in Sydney), everyone still has a job and the company is in a good cashflow position, he says. In the meantime, management has made an offer to buy the business from the administrator.
“For us, the key aim is to ensure that staff get looked after, that we keep this wonderful team together and that our clients are not left in limbo. Our aim is to finish projects.”
Linney met Papas a few times and says he came across as very sales-focused. “He was very confident; had a lot of presence.” He points out that, as far as he knows, Papas also oversaw creditable operations. Other than that, he’d rather not say too much about him.
Autonomous is a tier-one commercial and industrial solar company. As the industry persevered through covid, the company was starting 2021 with plenty on its plate. There was work for water utilities, government jobs, commercial projects. “The market last year was heavily affected by covid, but we were quite busy through the first half of 2020 because we were delivering projects that were signed and contracted pre-covid.” The pandemic had affected the workload late last year, however, as companies balked at committing on capital expenditure.
Then it all picked up again around February. “There were a lot of businesses coming back to market for solar and microgrids; we are on a strong upward trajectory at the moment but it takes time for that to translate into work.”
As to being caught up in such a terrible ordeal, Linney isn’t going to get bitter about it.
“It’s the first time for me, but I’m learning quickly,” he says. “I never thought I’d come anywhere near something like this.”
A new beginning
In mid-August creditors approved a management buyout offer funded by Linney, five Autonomous Energy colleagues and private investor John Rakic, owner and managing director of Trafalgar Group. “We’ve got a lot of stuff ready to go,” Linney told the The Australian Financial Review. “We haven’t used this time idly.”