Cranbrook School, Taronga Zoo builder Viridi Group goes into voluntary administration
A company that has worked on projects on Hayman Island and at Cranbrook School and Taronga Zoo has found itself in trouble over a multimillion-dollar issue.
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A major NSW construction company has been forced into administration as a result of the temporary suspension of a government contact worth millions, putting 115 jobs at risk.
Viridi Group has operated since 2020 and worked on a number of high profile projects including InterContinental Hayman Island Luxury Cabins, Cranbrook School redevelopment, Lismore emergency flood housing, Taronga Zoo wildlife retreat, the Gardens Macarthur residential apartments and Picnic Point Primary School.
But the company, which is as an off-site manufacturer of prefabricated building products and solutions in NSW, including modular housing for emergency temporary accommodation and in the education sector, has found itself in trouble after a major project was paused.
Christopher Darin and Joanne Keating of Worrells have been appointed as voluntary administrators of Viridi Group.
They had been advised by the company’s director that voluntary administration was necessary due to the temporary suspension of the government contract and to protect the interests of all key stakeholders.
“The director appointed voluntary administrators as the only responsible course of action
available after urgently exploring financial options and seeking professional advice from several parties,” Mr Darin said.
“This decision has been an extremely difficult one. The administration process is in its infancy and we’re working hard to immediately establish the company’s financial position and operations of the business, in order to continue to trade the business in a limited capacity during the voluntary administration.
“We are conscious and understanding of the impact the appointment will have on everyone involved, particularly employees and creditors.”
The company had previously faced financial difficulties in September last year.
Viridi Group CEO Ben Nurmi told news.com.au he was limited from talking about the specifics of the government contract, which was suspended due to “fiscal challenges” but the company was caught out by the move.
“The factory was set up to deliver certain products and we were halfway through that contact when we got advice it will be suspended,” he noted.
Staff were set to be impacted by the voluntary administration in the future, he added.
“The company is operating in a limited capacity as we are finishing off some of those works from the pre-suspension period,” he said.
“We employ on a direct basis around 15 staff and utilise a heavy subcontractor base of 90 to 100. Staff will be scaled back as delivery is scaled back, but at present they are still working.”
It comes after the company’s financial position forced it into Safe Harbour under the Corporations Act back in September 2023.
Safe Harbour is designed to allow directors to address a company’s financial difficulties behind-the-scenes and allows the company to continue to operate while under the supervision of an appropriately qualified adviser.
A letter leaked to news.com.au revealed the company’s situation last year.
“The primary objective of Safe Harbour is to develop and implement a restructuring plan for
the company with a view to return the company back to positive cashflow and profitability
within the next 4-6 months and result in payment if full of all creditors claims,” it said.
The letter written by insolvency specialist Scott Newton from Shaw Gidley Port Macquarie explained Safe Harbour would be “better outcome” for stakeholders rather than liquidation or voluntary administration.
“Whilst there maybe delays in payment of currently outstanding amounts the plan, once
finalised, will provide a time frame for bringing all creditors back within normal trading terms.
At this stage, based on initial draft cashflows, that is likely to occur within the next four
months,” it read.
Mr Newton told news.com.au he wasn’t responsible for the current voluntary administration with his involvement with Viridi Group ending in January.
“There were a number of issues with that company largely around the type of work they did. They had moved from a manufacturer to a manufacturer and installer and they were losing money on the installation side of things – it wasn’t their strength,” he said.
“They had some management issues and the purpose of Safe Harbour was to change the way they quoted on jobs and their role in those jobs and to rejig of management. There were a lot senior management terminated and a number of redundancies made to bring business to a profitable structure to move forward.”
Mr Nurmi added the move in September was made to enforce a “strategic management reset” to bring the company into a more profitable business model.
“Things were tracking well under that plan but that obviously is predicated on revenue being available and this key contractor was one of contributing revenue steams for the plan and a fairly major one,” he said.
He was confident Viridi Group would emerge from its current issues and continue to operate, he added.
sarah.sharples@news.com.au
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Originally published as Cranbrook School, Taronga Zoo builder Viridi Group goes into voluntary administration
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