Buying distressed Australian businesses and assets: a guide for international investors

Offshore buyers can acquire an Australian business or its assets from an administrator, receiver or liquidator, recapitalise it through a deed of company arrangement, or buy its secured debt. The processes move fast, sales are “as is, where is”, and foreign buyers may need Australian Government (FIRB) approval before completion. Settling the route, funding and approvals early secures the deal.

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Key points

Four routes: an asset sale by the external administrator, a deed of company arrangement (DOCA) with a recapitalisation, buying the secured debt, or a share transfer under s 444GA.
In a voluntary administration, creditors normally decide the company’s future within 20 business days of the appointment, unless the court extends that period.
Receivers must take reasonable care to sell for market value (s 420A), so expect a short, competitive process.
Unregistered or late-registered security interests can vest in the insolvent company.
Foreign buyers may need FIRB approval. The statutory decision period is 30 days, but extensions are common.

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at October 2026.

What are the routes to buy a distressed Australian business?

Asset sale. An administrator, receiver or liquidator sells the business or selected assets. The buyer leaves most liabilities behind. This is the most common route.

DOCA with recapitalisation. A DOCA is a binding compromise between a company in voluntary administration and its creditors. The investor funds the deed, creditors release the company, and the investor takes ownership with licences and contracts intact. See voluntary administration and restructuring.

Buying the secured debt. An investor buys the senior lender’s debt and security, then controls enforcement or the DOCA. In Re Nexus Energy Ltd [2014] NSWSC 1910, a Seven Group entity acquired the senior debt and then took the company through a DOCA.

Share transfer under s 444GA. A deed administrator can transfer existing shares to the investor with the shareholders’ consent or the court’s leave. Leave requires that the transfer not unfairly prejudice members (s 444GA(3)). Where shares have no residual value in a liquidation, that test is usually met. During the administration itself, share transfers need the administrator’s consent or a court order (s 437F).

How do the sale process and timetable work?

Voluntary administration. The administrator must convene the second creditors’ meeting within 20 business days of the appointment, or 25 if that period starts in December or shortly before Easter (s 439A(5)). The court can extend the period (s 439A(6)). Creditors then vote for a DOCA, a return to the directors or liquidation (s 439C).

Receivership. A secured lender usually appoints a receiver, who sells for the lender. Under s 420A, a receiver must take all reasonable care to sell for not less than market value or, if there is none, the best price reasonably obtainable. Expect a short advertised campaign and two-stage bids.

Liquidation. A liquidator sells assets, often by tender or auction, with no fixed deadline. See liquidator claims.

What can you expect on due diligence, sale terms and employees?

Insolvency sales are “as is, where is”. The seller gives few or no warranties, warranty insurance is rarely available and the deposit is usually non-refundable. Due diligence is compressed and relies on the data room, public searches and site visits. Priorities are:

Security. Search the Personal Property Securities Register (PPSR). Under the Personal Property Securities Act 2009 (Cth), a security interest that is unperfected when administration, a DOCA or winding up starts vests in the company (s 267). A late-registered interest may also vest (s 588FL). Registered interests must be released at completion.
Contracts and licences. Check change of control and insolvency termination rights, and which consents are needed.
Clawback risk. Pre-insolvency payments can be challenged. See unfair preference claims.
Tax. Plan for GST, Queensland transfer duty where Queensland land or business assets are involved, and the acquiring structure.

Employees. In an asset sale, employees stay with the insolvent seller and the buyer chooses whom to offer employment. Under the Fair Work Act 2009 (Cth), a “transfer of business” occurs where an employee moves to the new employer within three months, does substantially the same work, and there is a connection such as a transfer of assets (s 311). Transferring employees generally carry their service and certain accrued entitlements, although a non-associated buyer can elect not to recognise prior service for some purposes. In a DOCA, the company remains the employer and the deed must give employees at least the priority they would have in a winding up (s 444DA).

Do foreign buyers need FIRB approval?

The Foreign Acquisitions and Takeovers Act 1975 (Cth) regulates acquisitions by “foreign persons”, including offshore companies, funds and trusts. Approval is needed where an acquisition is a notifiable action above the monetary threshold, or a notifiable national security action at any value.

For 2026, the general threshold for a private investor acquiring an Australian business is $347 million. A $1,498 million threshold applies to private investors from certain free trade agreement partners, except for sensitive businesses. A cumulative $75 million threshold applies to agribusiness. A $0 threshold applies to foreign government investors, including many sovereign wealth funds and state-linked entities. Thresholds are indexed each 1 January.

Acquiring a direct interest in a “national security business”, or national security land, must be notified at any value (s 55B). The Treasurer can “call in” non-notified deals on national security grounds (s 66A) and, rarely, review an approved deal under the last resort power (s 79A).

The statutory decision period is 30 days after notification (s 77). The Treasurer can extend it by up to 90 days (s 77A), and investors are often asked to agree to more time. Fees are indexed each 1 July. For a business acquisition they start at $15,100 for consideration of $50 million or less and rise in tiers to a cap of $1,205,200. Administrators resist long FIRB conditions, so lodge early.

What should you do if you want to buy a distressed Australian business?

Engage Australian advisers early and confirm whether your group is a foreign person or a foreign government investor.
Choose the route and model the timetable against the convening period.
Lodge any FIRB application as soon as the target is identified.
Fund the deposit and price in Australian dollars through an Australian escrow or trust account, so the seller sees proof of funds.
Complete PPSR, land, litigation and licence searches, and settle the employee strategy.
Document security releases and transitional services, then register new security and update licences after completion.

How Taylor David can help

From Brisbane, we act for international investors, funds and lenders in distressed acquisitions across Australia. We can:

advise on the route and negotiate with administrators, receivers and liquidators
prepare asset sale agreements, DOCAs and debt purchase documents
run PPSR, title and contract due diligence and clear security interests
co-ordinate FIRB applications and completion conditions
apply to the Supreme Court of Queensland or the Federal Court for s 444GA leave
handle completion, escrow and post-completion disputes.

We advise only on Australian law and Australian-based matters, alongside your home-country advisers. This work sits within our reconstruction and turnaround and insolvency practices.

Frequently asked questions

Questions we are often asked

How quickly must an offshore buyer move in a voluntary administration?

Very quickly. The convening period for the second creditors’ meeting is 20 business days from the appointment, or 25 around Christmas and Easter. The court often extends it in complex matters, but a buyer should assume weeks, not months. Due diligence, funding, any FIRB application and the deal documents need to run in parallel from the start.

Can a foreign buyer complete before FIRB approval is granted?

Not where approval is required. Completing a notifiable action without approval is a contravention and can attract penalties and divestment orders. Sale contracts therefore make completion conditional on FIRB approval. Administrators prefer short conditions, so a buyer should lodge early, answer information requests promptly and ask for the decision to be expedited.

What does “as is, where is” mean in an Australian insolvency sale?

The buyer takes the assets in their current state and location, with no warranties about condition, title, compliance or value. The external administrator sells only what the company has and gives limited personal assurances. The buyer’s protection comes from its own searches, inspections and the price it pays, not from recourse against the seller.

Why would an investor buy the company’s debt rather than its assets?

Holding the senior secured debt gives control. The debt holder can appoint a receiver, negotiate the DOCA from strength and, if the debt exceeds the company’s value, drive a s 444GA transfer that delivers the shares. It also keeps the corporate entity, its licences and its contracts intact, which matters in regulated industries.

Do employee entitlements transfer to the buyer of an Australian business?

Only for employees the buyer chooses to employ, and only to the extent the Fair Work Act and the sale agreement provide. Transferring employees usually carry their service and certain accrued leave, and a non-associated buyer can decide not to recognise prior service for some purposes. Entitlements of employees not transferred remain claims against the insolvent seller.

General guidance only – not legal advice. Please obtain independent legal advice before relying on any of this information. The law is stated as at October 2026.

Related expertise

Reconstruction & Turnaround →Insolvency →Litigation →

The earlier we talk, the more options you have.

To discuss your situation in confidence, call Scott D. Taylor on +61 7 3229 9800, email [email protected] or send us an enquiry online.

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