Tycoon Andrew Roberts to pay staff, creditors after $20m bailout plan

The building company’s Victorian arm collapsed in March with debt of $272m, but staff and small creditors will get some money.

Building on an Amazon facility in Craigieburn was stalled after Roberts Co’s Victorian fell into administration in March.

Tycoon Andrew Roberts is looking to pay staff and creditors of the collapsed building company that bears his name after they accepted his $20m bailout plan.

Creditors of the collapsed Roberts Co building business have accepted a deed of company arrangement proposed by Mr Roberts that will deliver them about $20m.

Some subcontractors’ claims are yet to be resolved as the new builders lined up for some stalled projects in Melbourne are yet to start, and a way of mitigating losses suffered by developers under contracts in Victoria is also still being worked on.

But Mr Roberts, who had sought to emulate the success of the Multiplex empire his father founded, and he once ran, by setting up Roberts Co, has focused on getting staff and small creditors paid out.

Under the proposal received from his private Martigues entity, $17.4m of new money will be made available to creditors, which will cover staff and these smaller creditors, adding to about $2.6m already allocated.

The deal was backed by two sets of administrators – McGrathNicol and FTI – which are in charge of different parts of the Roberts Co empire. They determined that the DOCA provided a significantly better outcome for creditors than a liquidation.

All up, interests associated with Mr Roberts will tip in about $20m to pay staff, though some bigger tradies and larger creditors will take a haircut, albeit less than some had expected in a construction company insolvency.

Roberts Co companies called in administrators in March in the wake of major projects blowing out in Melbourne.

Roberts Co companies called in administrator McGrathNicol to Roberts Co (Vic) in March in the wake of major projects blowing out in Melbourne. In a report, they cited project losses – including on the building of an Amazon centre in Melbourne – and the withdrawal of financial support from related companies that had provided a deed of cross guarantee as the main reasons for the failure of Roberts Co’s Victorian arm.

Administrator FTI took on the head company – RCAH – which remained after the sale of Roberts Co’s NSW arm to Middle Eastern company Arada in May.

Under the DOCA proposal received from Mr Roberts’s Martigues there will also be forgiveness of significant related entity loans, which will improve the outcome to creditors.

Former employees will receive all their entitlements in full and unsecured creditors could receive up to 33 cents in the dollar, with smaller creditors expected to be paid in full.

FTI said the DOCA would see the former employees and creditors of the companies secure a better outcome and provide greater certainty than had the group been placed into liquidation. FTI’s Vaughan Strawbridge said the firm had worked with McGrathNicol, going through the issues in the group.

“There is still a lot of work for McGrathNicol to undertake in resolving subcontractor claims and mitigating losses under contracts in Victoria, but this is a significant contribution to the payment of creditors that has been secured,” he said.

A liquidation could have probed claims of insolvent trading and Mr Roberts being a shadow director of part of the fallen company, which surfaced in a report by McGrathNicol into the Victorian arm and which the tycoon vigorously denied.

It is understood Mr Roberts was not in the country for most of the period that was under the microscope and did not play an active role in the directors’ decision-making.

The company’s Victorian arm fell into administration owing creditors about $272m after it was hit by heavy cost overruns on four major projects, which weighed on the profitable NSW division.

The holding company, which called in FTI in May, disclosed it was facing claims from more than 265 creditors that amounted to more than $100m.

Originally published as Tycoon Andrew Roberts to pay staff, creditors after $20m bailout plan