This article is from the Australian Property Journal archive
ANOTHER builder has crumbled, after WeBuild pulls out of its $350 million merger with major Western Australian building and engineering company Clough Group.
Clough Group ran out of options this week, entering voluntary administration and leaving the fates of 1,250 workers up in the air, after Italian industrial construction group WeBuild stepped away from its conditional takeover deal.
“Whilst responsibility for the management of Clough has now passed to the appointed Administrators, they will no doubt rely heavily on assistance from the Board and Management in exploring options for the restructure and recapitalisation of the company,” read a statement by Clough.
“The process also provides for the possibility of compromise with creditors, through adoption of a Deed of Company Arrangement, a binding arrangement between the company and its creditors governing how the company’s affairs will be dealt with.”
With the firm delivering industrial projects across the energy, resources and infrastructure sectors, the fate of many developments is also unclear, including the federal government’s Snowy Hydro 2.0 expansion in the Snowy Mountains, after the first tunnel was just completed in October.
A statement released by WeBuild said the deal fell apart after both parties “jointly determined and agreed that there is no reasonable prospect of that acquisition proceeding through to a successful completion.”
“The parties have therefore unconditionally agreed to terminate the sale and purchase agreement with immediate effect.”
Prior to the conditional acquisition of the group, WeBuild reportedly backed Clough with a $167 million loan and was on its way to providing an additional $30 million.
This after Clough posted a $375.3 million loss and a $304 million working capital deficit for FY22.
Sal Algeri, Jason Tracy, David Orr and Glen Kanevsky from Deloitte have been appointed as voluntary administrators by Clough’s owners.
“With our appointment, over the next two to three days, we will carry out an urgent assessment of the financial position of the Clough Group companies, with a view to sourcing immediate interim funding to be able to continue work on as many projects as possible as quickly as possible,” said Algeri.
“An accelerated sale and recapitalisation process will also commence.”
Clough Group includes 12 companies and its administration will leave not just its Australian employees with uncertain futures in the run up to the holiday season, but a further 1,250 employees based overseas in Papua New Guinea, the UK and the US.
In addition to the Snowy Mountains expansion, which would have seen a further 2,000 megawatts of dispatchable, on-demand generating, other projects are left unfinished across NSW, Western Australia and Papua New Guinea.
Following a year full of major developers and builders folding, including ProBuild, Multibillion-dollar developer Caydon Property Group, and Queensland builder Condev.
