Troubled builder St Hilliers owes $40m with 20 projects in balance

Troubled construction giant St Hilliers owes creditors more than $40m as administrators struggle to save more than of its 20 projects around the country.

Administrators of troubled construction giant St Hilliers Contracting are rushing to restart projects around the country as it’s revealed the company owes creditors more than $40m.

Glenn Livingstone, of WLP Restructuring, told creditors on Wednesday that work on one of the company’s major projects in Queensland could restart as early as this week and he was hopeful others could also recommence soon.

Two contracts for Queensland projects have already been terminated, leaving a pipeline of about 18 stalled projects, including 10 for the Department of Defence.

Mr Livingstone declined to specify individual projects impacted but according to the company’s website Department of Defence works including the Greenbank Training Area in Queensland and sewage treatment works at RAAF Amberley.

St Hilliers is licenced by the Queensland Building and Construction Commission to undertake work valued at up to $240m.

Mr Livingstone said early investigations had revealed the company had been hit by a combination of wet weather, rising interest rates and other costs.

St Hilliers director Tim Casey at the company offices in The Rocks, Sydney.

“About 100 days had been lost to wet weather which added to the problems,” Mr Livingstone said. “The company also faced having to deal with fix price contracts as other costs rose.”

He said subcontractors had been paid up to the last payment cycle but could be owed up to $10m for work done after that. Employees could be owed up $4.3m while there were $16.6m in retention claims and $13m in cash back guarantees held for clients.

Retentions in construction contracts refer to the percentage of payment that is held until the completion of the project. The funds are to ensure that contractual obligations, including the fixing of defects, are met.

‘About 100 days had been lost to wet weather which added to the problems’

Mr Livingstone said if work did restart on projects, funds would be held in trust accounts to ensure subbies were paid. “We will need to look after these people if we are to be successful in getting projects done,” he said.

Mr Livingstone said he would seek an extension of time from creditors while potential rescue packages were looked at, including a proposed deed of company arrangement from St Hilliers director and founder Tim Casey. Mr Casey pumped a reported $32m into St Hilliers in the year leading up to its failure in an attempt to save the business.

The company was founded in 1989 by Mr Casey, who served as vice president of the NSW Property Council from 2009 until 2011.

The group made a loss of $8.9m last financial year and a deficit of $3.1m the previous year, according to financial reports lodged with ASIC.

Latest figures show that for the first two weeks of 2024, 48 construction-related companies collapsed, with 25 of them based in NSW.

St Hilliers’ Thornton project.

That represents almost a quarter of the total 193 company failures across all industries in the two weeks to January 14, according to ASIC data published earlier this month.

The $360bn building sector is bracing for another horror year with insolvencies predicted to spike in 2024 as the lagging impact of Covid-19 continues to bite.

Subbies working for St Hilliers were first alerted to the company’s plight on February 4 when they were told there would be no work at one of its key projects, the Bernborough retirement village in the inner northern suburb of Brisbane. Other projects impacted include Thornton Central in North Penrith, NSW, and 711 Hunter Street in Newcastle West.

In 2021, St Hilliers was embroiled in an investigation by the Australian Building and Construction Commission that found it had falsely inflated subcontractor quotes on Department of Defence projects. The company expressed remorse and repaid amounts totalling in excess of $1.3m.