Builders bid to complete Porter Davis projects

The Porter Davis home building empire is likely to be broken up with builders looking to take on jobs they believe can be turned into profitable work.

The Porter Davis home building empire is likely to be broken up with builders looking to take on jobs they believe can be turned into profitable work.

Just days after Grant Thornton, the liquidator of the Porter Davis, rejected an unlikely bid for the entire operation, it is considering break-up options.

The liquidator on Monday rejected as not “credible” a left-field offer from Melbourne businessman Amit Miglani to buy collapsed construction giant Porter Davis Homes Group.

He had submitted a bid to purchase Porter Davis, which went into liquidation last month leaving about 1700 projects in limbo in Victoria and Queensland, with another 779 contracts signed.

Senior industry figures said the liquidator was now dealing with building companies on about half of the incomplete homes that are dotted across Melbourne’s suburbs, with interest in Queensland home sites as well.

The builders bidding for work are willing to pay between $5,000 and $10,000 per site to pick up the work, which will see them complete houses.

However, there could be a sting in the tail for Porter Davis customers as they may be charged more, with incoming builders looking to bill at higher rates, reflecting the higher cost of trades compared to customers’ fixed contracts with Porter Davis.

Industry players said that the difference may be partially covered in Victoria by the state insurer, the Victorian Managed Insurance Authority, but people looking to finish off some homes could be left out of pocket.

Porter Davis was operating on fixed contracts that did not take account of the dramatic price increases that have hit the industry and new cost structures could reflect this surge.

A Grant Thornton spokeswoman said the liquidator had sought submissions from builders who have expressed an interest in supporting Porter Davis customers to complete their home builds in circumstances where the company was not in a position to do so.

“This includes seeking information regarding each builder’s willingness and capacity to complete builds in each region where Porter Davis has customers,” she said.

Under the process, while the liquidator is able to provide an introduction to customers, providing them with options for new builders in their region, customers are not obliged to engage one of the builders identified by the liquidator.

“The decision to proceed with a particular new builder will be up to each customer and they should seek their own legal advice if necessary,” the Grant Thornton spokeswoman said.

The liquidator confirmed that some builders had offered to pay an introduction fee to the liquidator in lieu of the marketing and origination costs they would typically incur in identifying and securing new customers.

In turn, the liquidator would provide specific designs and drawings required by an existing customer’s new builder to complete their homes on a fee-free basis.

“The liquidators intend to provide a further update to customers later this week, including a short list of those builders by region who have expressed an interest in assisting customers with their home build,” the Grant Thornton spokeswoman said.

Originally published as Builders bid to complete Porter Davis projects