Grocon owner Daniel Grollo fronts meeting of out-of-pocket creditors

Grocon owner Daniel Grollo has told out-of-pocket partners and suppliers he is ‘very sorry’ for the builder’s collapse and he aims to take the business in a new direction.

Grocon owner Daniel Grollo says he aims to steer his troubled building empire in a new direction away from simply providing construction services.

The third-generation heir to Grocon appeared before a meeting of creditors on Wednesday, apologising to business partners and suppliers who face millions of dollars in losses.

“Today is a difficult day in the 73-year history of Grocon,” Mr Grollo told the online meeting.

“While we have wanted to move away from construction during the last few years, we have found ourselves closing it down in a most undignified way, causing pain to employees, creditors and creditors’ employees. For that I am very sorry.”

Mr Grollo laid the blame for Grocon’s downfall on its legal stoush with the New South Wales government over its Central Barangaroo project in Sydney.

Grocon built the Eureka Tower in Melbourne

Grocon is suing the NSW government for $270 million, saying authorities did not tell it that Crown Resorts’ project would block the views of its development.

Mr Grollo said he hoped creditors would back a deal which links their payment to Grocon winning the court case.

The case is not expected to be heard until late 2021 or early 2022.

“My primary goal as I look forward to the next year is to win that court case and take the company forward in new directions,” he said.

In recent years Grocon has pioneered the build-to-rent sector in Australia where it builds and owns developments, renting the apartments out.

That side of its business remains operating.

About 30 creditors dialled into the meeting hosted by administrator KordaMentha.

Melbourne property fund APN Property Group – which is involved in an existing legal dispute with Grocon – quizzed the administrator and Mr Grollo about Grocon’s complex web of inter-company lending and an $11.5m loan the building giant extended to its owner.

Mr Grollo did not respond.

Grocon built Melbourne’s Rialto Towers.

KordaMentha administrator Craig Shepard said he was investigating the loans as part of the administration.

In a twist, Bruno Grollo – Daniel’s father – helped set up APN and the company’s chair is former Grocon director Chris Aylward.

Bruno and Adam Grollo – Daniel’s brother – are also key investors in APN’s listed property funds.

Mr Shepard said creditors, which include tradespeople and other suppliers owned between $8.5m and $10m, face heavy losses if Grocon is liquidated.

Mr Shepard is picking through $723m in inter-company loans among Grocon companies in administration and another $318m owing to more than 30 related companies not in administration.

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