Debts of collapsed PBS Building companies climb to $169m, up from $25m initial estimate

The amount of debt owed by a collapsed building firm with projects along the east coast has exploded with more than 500 creditor claims. Here’s what administrators plan to do about it.

The amount of debt owed by collapsed firm PBS Building has exploded by more than $100m, with liquidators now saying more than 500 creditors have claimed almost $170m.

The latest figures, once finalised would mean the PBS Building collapse was Australia’s worst since the $250m failure of Probuild in February 2022.

The builder – with companies based in Canberra plus offices in Sydney and Brisbane – stopped work and locked up its sites on March 5.

Its five companies went into administration on March 7.

The group had 24 projects worth $439m under way, including Serenity Reserve at Helensvale and 19-level Shoreline at Old Burleigh Rd in Surfers Paradise.

Initial estimates had debts of the company at $25m, a figure the directors revised to $60m in April.

The Curl development at Bokarina on the Sunshine Coast, a project by PBS.

A report from administrators Jonathon Colbran, Richard Stone and Mitchell Herrett of RSM Australia said there were now 500 creditors with claims totalling $169m, with about $55m of those from trade creditors.

The administrators said some of the claims could be duplicates or covered by project trust accounts and that the true number of claims could come down by as much as $50m.

The report said the PBS companies had become insolvent “on or before” February 10, 2023, and had 14 loss-making projects in FY22.

The PBS companies logged a $10.27m loss in FY22 and a $19.63m loss from July 1 2022 until February 29 this year.

Directors of the five PBS companies say they did not trade while insolvent and told administrators they would not have any capacity to pay any insolvency or other claims against them.

The administrators will recommend PBS be placed into liquidation unless a suitable Deed of Company Arrangement is found.

PBS building directors Adam Moore and Ian Carter

Administrators are pursuing $6.8m in construction contractor claims on behalf of PBS companies.

Mr Colbran said current and former directors and managers had continued to assist with the administration.

“From our preliminary analysis of the companies’ records, we can see that the PBS Building directors took a number of steps to try and navigate through the challenges they were facing, including implementing a three-phase turnaround plan,” he said.

“However, our preliminary assessment is that the companies ultimately became insolvent on or before February 10, 2023, as a consequence of a number of factors including being unable to secure the necessary level of additional working capital and additional support.”

The Serenity Reserve townhouse project which was under construction by PBS Building.

The claimed $169m debt eclipses the $147m owed by Porter Davis, $61m owed by Condev and $50m owed by Sydney builder EQ Constructions.

The largest building collapse in recent years has been Probuild, which went under in February 2022 with debts above $250m.

Company records have revealed PBS was tied to a $42m collapse exactly a decade ago.

The group’s Queensland company alone has subcontractor debts declared at more than $4m.

PBS Building is considered a test case for Queensland’s new project bank accounts, which administrators said held $4m for projects in NSW and Queensland.

The next meeting of creditors is to be held on September 6.