Nicheliving calls in administrators for ‘urgent’ financial review

Embattled builder Nicheliving’s entire construction division has been handed over to administrators, just weeks after the state government reached a $40 million rescue deal to get more than 200 homes finished.

KordaMentha’s Richard Tucker and John Bumbak have taken control of ultimate parent company Nicheliving Holdings, its construction arm Projex Management and Construction, and Rubix Future Building Technology after being appointed voluntary administrators on Wednesday.

An unfinished Nicheliving home.Credit: Ross Swanborough

The pair have been tasked with undertaking an urgent assessment of the entities and their financial position with a view to restructuring the group.

But in a statement released on Thursday, KordaMentha insisted it would be business-as-usual for Nicheliving’s development division.

It has been less than a month since Nicheliving’s construction arm agreed to withdraw a State Administrative Tribunal battle for the renewal of its building license for the next decade under a deal with the state government.

Projex had been stripped of its license over growing debts, including a tax bill of more than $7 million.

But Nicheliving managing director Ronnie Mihael-Elhaj had rubbished claims it did not have the capacity to clear its $44 million worth of debt, declaring it had $100 million in assets.

It has sold almost $12 million worth of property in recent months.

The deal was designed to allow the hundreds of customers waiting for their homes to be completed access to up to $200,000 in home indemnity insurance under policies issued by QBE.

With more than 200 homes unfinished at the time, the taxpayer bailout was tipped to cost up to $40 million.

It is understood the administration will not affect those pursuing home indemnity insurance claims.

In a one-line statement published on its website on Thursday afternoon, Nicheliving said its property development and real estate divisions continue to operate as usual and remained unaffected by “the recent restructuring of the group’s construction division.”

The company has repeatedly defended its handling of client contracts, pinning the lengthy building delays on COVID, government stimulus, labour shortages and supply chain issues.

However, data suggests Nicheliving signed on more than double the number of customers it would normally sign-on between 2020 and 2021.

The construction division was the company’s primary income stream, with Nicheliving’s lawyer Martin Cuerden, SC, warning SAT in August that the refusal of its building registration renewal would likely trigger the downfall of the entire group.

Opposition Leader Shane Love said the news would be welcomed by Nicheliving customers.

“For far too long the warning signs have been clear. Nicheliving accumulated massive debts with the ATO, left hundreds of homes unfinished and abandoned subcontractors without payment,” he said.

“It’s incredibly frustrating that it has taken so long for regulators, including the state government, to act.”

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