This article is from the Australian Property Journal archive
CONSTRUCTION giant Probuild is in the hands of administrators Deloitte after its South African parent company Wilson Bayly Holmes-Ovcon (WHBO) withdrew financial backing.
It is one of 18 companies in the WHBO Australia (WHBOA) Group placed into administration, putting $5 billion of major projects across Australia in jeopardy.
Deloitte partners Sal Algeri, Jason Tracy, Matt Donnelly and David Orr were appointed voluntary administrators.
“WBHOA has been a major contributor to the construction sector and the broader economy, including as a direct and indirect employer. The COVID-19 pandemic has created challenging trading conditions for many businesses, and for WBHOA, which has also been impacted by certain loss-making projects,” Algeri said.
“Our immediate focus will be to undertake an urgent assessment of the entities’ financial positions and work with key stakeholders to stabilise the business and projects where possible.
“We will assess options to preserve value, and engage closely with creditor groups and other stakeholders across the spectrum, including clients, employees, unions, suppliers, contractors and sub-contractors.
“We will also also be commencing a sale and recapitalisation process in order secure a new owner for the businesses.” Algeri added.
Photo: Note Viriyarat (Australian Property Journal)
WHBOA directly employs about 750 people with thousands more working as sub-contractors, and has annual revenue of about $1.4 billion.
Speculation about the company’s future had been quietly mounting as works at Far East Consortium’s $2 billion West Side Place and Ritz Carlton project on the former site of The Age in Melbourne fell behind.
It took over the Ribbon in Darling Harbour last year after rival construction company Grocon declared insolvency.
Workers across Probuild construction sites were told to go home on Wednesday and security guards were posted to the sites.
WBHO put some of the blame on the Australian government’s handling of the pandemic.
“The Australian government’s hard-line approach of managing COVID-19 through a combination of border restrictions, snap lockdowns and mandatory work-from-home regulations for many sectors, has had a considerable impact on property markets as well as other industries such as the leisure industry,” it said in a statement.
“Of particular concern is the project delivery capability of the business which has been negatively affected by unplanned COVID-19 restrictions, the contractual environment and the increased difficulty in raising guarantee facilities necessary to secure new work.
“The protracted effect of COVID-19 has delayed any meaningful economic recovery and procurement activity in Australia.”
The collapse comes a year after Treasurer Josh Frydenberg used national security grounds to scupper a $300 million sale of the company to China State Construction Engineering Corporation.
Probuild had 18 projects active, with most in Victoria and others in New South Wales, Queensland and Western Australia.
Probuild’s clients reads as a who’s who list of local and global property heavyweights.
Among them are Blackstone, for which Probuild is delivering the Caufield Village Precinct in Melbourne’s south-east for Blackstone – the US private equity giant’s first Melbourne build-to-rent project – as well as Malaysian developer SP Setia. Probuild has been constructing their 65-level residential skyscraper UNO Melbourne.
Probuild’s other projects include:
- CSL’s new headquarters and research lab in North Melbourne;
- Elizabeth North in Melbourne, a 16-storey education and biomedical building by developer PDG Corporation;
- The 29-storey Victoria University City West Tower, poised to become Melbourne’s tallest vertical campus;
- The $190 million, 28-storey 10,000 sqm office building at 130 Little Collins Street in Melbourne for Jeff Xu’s Golden Age Group;
- Sydney’s tallest residential apartment tower, Greenland Centre, on behalf of Chinese developer Greenland. The 67-level 235-metre will comprise 479 apartments;
- The 41,000 sqm refurbishment of Sydney’s landmark MLC Centre for Dexus;
- 443 Queen Street Brisbane, the city’s first subtropical apartment tower for Cbus Property;
- 502 Albert Street, a 15-storey 150-room hotel for Woodlink;
- Exchange, Curtain University’s first precinct in the Perth campus which will include three buildings for student accommodation and hotel rooms.
