Probuild collapse to hit apartment project delivery
The South African parent company of Probuild has appointed administrators to the Australian construction company.
Workers were leaving Probuild construction sites on Wednesday.
Workers were first seen removing their tools from Cbus Property’s 443 Queen St project in Brisbane, a much delayed project.
Its projects also included in Melbourne, the Far East Consortium’s West Side Place project site, a $2 billion, four-tower development.
Probuild have been constructing the latest stage at the master planned Caulfield Village, delivering over 430 Build-To-Rent (BTR) apartments, for the Beck Property Group.
Projects include the 65-storey residential UNO building in Melbourne scheduled for completion next year.
The Melbourne-based firm, one of the largest construction companies in Australia, took over construction of Sydney’s new glass IMAX building in Darling Harbour after the collapse of Grocon.
It is also doing construction for Frasers Property at Macquarie Park.
Probuild directly employs 500 staff, with the collpase set to impact on thousands working as subcontractors.
Apartment developers will need to update their off the plan buyers on revised construction timelines.
Johannesburg-listed builder Wilson Bayly Holmes-Ovcon confirmed it put the Australian business into administration after it had been operating at a loss.
“With effect from 22 February 2022, the company... will no longer provide financial assistance to [Probuild holding company] WBHO Australia,” WBHO said in a statement.
Deloitte Turnaround & Restructuring partners Sal Algeri, Jason Tracy, Matt Donnelly and David Orr will be the Voluntary Administrators over certain companies within the WBHO Australia Group.
Probuild's most recent annual financial filings put revenue at $1.3billion.
Algeri confirmed WBHOA had 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.
“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.”
A $300 million acquisition of Probuild fell through in January last year after Treasurer Josh Frydenberg said he would reject China State Construction Engineering Corporation's bid for the Australia-based and South African-owned company.
National security concerns linked to state-owned China State Construction Engineering Corporation's connections to the Chinese defence industry was understood to be a key reason for the Treasurer not to approve the foreign investment.
Maxwell Shifman, National President of the Urban Development Institute of Australia, recently noted cost blow-outs in the wake of the initial success of HomeBuilder had created major underlying challenges for the industry in what was emerging as possibly a “profitless boom.”
