Building company Mahercorp enters voluntary administration

As a result of the escalating cost pressures, construction firm Mahercorp has decided to enter voluntary administration.

As a result of the escalating cost pressures, construction firm Mahercorp has decided to enter voluntary administration.

Mahercorp, the parent company of Eight Homes and Urbanedge Homes, will halt the construction of approximately 730 homes while working with administrators.

The development follows the collapse of Porter Davis, which left uninsured customers stranded.

In a statement to customers, Mahercorp CEO Steve Maher emphasised that the company was not in the same predicament as Porter Davis.

Many building companies are facing problems.

He said that his goal was to work with the administrator to develop a plan that would allow the company to restructure.

Mr Maher attributed the decision to enter voluntary administration to the rising costs of building and labour, as well as inflation, which all builders face in this unprecedented climate.

“I want to emphasise that Mahercorp has not collapsed and is not in liquidation,” Maher said in the statement.

“My intention is to work with the administrator on a plan that I hope allows us to restructure the business, creating a more sustainable footing and to complete your home.”

In an effort to mitigate these cost increases, the company has been renegotiating its terms with suppliers and insurers for several months.

“To ease the strain of these cost increases, for some months now we have been renegotiating our trading terms with our suppliers and insurers. Their support to date has helped us manage spiralling costs,” Mr Maher said.

Mahercorp has gone into voluntary administration.

“Entering voluntary administration was the only option after being advised earlier this week that the insurer for our supplier of essential safety equipment, would no longer support our business.”

Mahercorp has informed customers that construction of new homes will be suspended for the five-week duration of the voluntary administration.

Cor Cordis has been appointed as administrators for the company.

In a statement, they said they would pause construction works while they urgent assess the business’s operations.

“We’ve commenced an urgent review of Mahercorp’s financial position and have held preliminary discussions with senior management regarding a proposal to restructure the business,” they said.

“We’ve set up a direct phone line and email address for customers, employees, and creditors.

“We will be providing regular updates to all stakeholders as we work through the voluntary administration process.”

Building companies are still suffering from the impacts of the Covid pandemic and a lack of timber and other materials due to the Russia-Ukraine conflict.

Across Australia, hundreds of millions of dollars are owed by failed companies to subcontractors, tradesmen, clients and the tax office.

More than a dozen building comapnies have collapsed this year.

Some of the biggest names in Australian construction have become insolvent over the past year, including Probuild, Home Innovation Builders, Privium, Condev Construction and Pivotal Homes.

The problems started during the Covid-19 pandemic, with many companies unable to find staff and facing problems sourcing and paying for materials due to a worldwide shortage.