Australian construction giant Probuild falls into self-management


Australian construction giant Probuild has collapsed and is under control, and about $ 5 billion (US $ 3.6 billion) of construction projects are at a loss.

Probuild confirmed on Thursday that South Africa’s parent company Wilson Bayly Holmes-Ovcon (WBHO) Ltd has suddenly terminated all cash and securitization support in Australia.

“We are involved in a series of situations, not ours. We work closely with our managers on many plans to protect our clients, subcontractors, and employees. We are cooperating.

“The Probuild brand is strong and we intend to keep it. There are several options to raise the funds needed to survive as an Australian luxury building company. These are all pursued. “Let’s do it,” a Probuild spokeswoman said in a statement.

WBHO said it has adopted a more conservative bidding strategy for new low-risk projects in response to Australia’s increasingly competitive contractual construction environment.

However, the procurement of acceptable projects was influenced by COVID-19 and was further complicated by the government’s “hard approach” to managing the pandemic.

“The long-term impact of COVID-19 has delayed a meaningful economic recovery and procurement activity in Australia,” said WBHO. statement About the decision to end financial support.

Over the past four years, it has supported the Australian branch in South African Rand, which is worth about $ 182 million (US $ 131 million).

“Australian companies were unable to complete the project on time, recover fluctuations and delay billing, resulting in significant losses over previous accounting periods, further financing and balance from WBBOC. I need seat support. ” ..

Epoch Times Photo
On September 17, 2020, a construction worker was photographed at a construction site in the city center of Melbourne, Australia. (William West / AFP via Getty Images)

Hundreds of workers employed by Probuild have encountered unannounced closed gates on various projects across the country.

The Probuild project includes Melbourne’s tallest homes, luxury condominiums in Perth, and the Tower of all-suite suites on the Gold Coast.

In January 2021, WBHO attempted to sell its Probuild business to a Chinese construction company.

However, the $ 300 million bid was rejected by Australian Finance Minister Josh Frydenberg for national security reasons.

Going forward, Deloitte, appointed as an administrator, will focus on assessing Probuild’s financial position and stabilizing its business and projects where possible.

“We will also begin the process of selling and recapitalizing to secure new owners of the business,” said Deloitte’s manager, Sal Algeri.

The construction union CFMEU said it is currently seeking information to understand the impact of the situation on workers.

“As always, the union will endeavor to ensure that the interests of its members in the construction industry are the primary consideration,” said Nigel Davis, CFMEU National Assistant to the Construction State.

Professor Jason Harris of the University of Sydney said the collapse of Probuild is a reminder that Australia needs effective bankruptcy and restructuring laws to help companies in financial difficulty.

“Singapore and the United Kingdom have recently introduced major new restructuring laws. Australia needs to consider revising bankruptcy laws as many of them date back to the 19th century,” said a bankruptcy expert. One Harris told The Epoch Times. .. “New modern bankruptcy and restructuring laws may help businesses stay longer.”

According to the Australian Construction Contractors Association (ACA), the construction sector accounts for 25% of all Australian bankruptcies, and according to the Australian Contractors Association (ACA), no steps are taken to improve the sustainability of the industry. As long as this trend will continue.

“The current focus on choosing contractors based on lowest price and highest risk transfer is unsustainable,” said ACA CEO John Davis. statement.. “We have to move away from the idea that construction is a zero-sum game of winners and losers.

Rebecca Chu

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Rebecca Zhu is based in Sydney. She focuses on Australia’s economy, property and education. Do you have a hint? Contact her at [email protected]

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