Struggling Metricon given $30m lifeline after crisis talks

Metricon has landed a new financing deal that will see new funding from the Commonwealth Bank, including $30 million in cash.

Metricon has landed a new financing deal that will see new funding from the Commonwealth Bank, including $30 million in cash from its shareholders, after a horror day on Friday.

The fresh support came as NSW Premier Dominic Perrottet said his government would consider a bailout option for the company if necessary.

Metricon, one of the country’s largest construction firms, has denied speculation it is in financial difficulty after the shock death of its founder Mario Biasin last week, days before crisis talks with the Victorian government.

Acting chief executive Peter Langfelder has insisted it is “business as usual” for the company, which employs around 2500 staff and has a pipeline of thousands of homes under construction.

But The Australian reports senior levels of the NSW government fear the builder is at risk of imminent collapse and are scrambling to finalise a rescue package for the state’s building industry and customers.

The NSW building regulator has already sought advice on engaging receivers, according to the newspaper, which further reports that contrary to its public statements, sources familiar with the company’s finances say cashflow remains dire and that the business is teetering on bankruptcy.

According to The Australian, senior NSW government representatives including from Premier Dominic Perrottet’s office held meetings on Thursday examining bailout proposals.

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Metricon acting chief executive Peter Langfelder speaks about the state of the home building company alongside acting executive chairman Ross Palazzesi.

In each state and territory, there are similar schemes run by respective governments that could see the cost to taxpayers balloon even further in the event of a collapse.

It has previously been estimated that taxpayers may have to fork out more than $28 million to bail out families left with unfinished homes in NSW alone if the company goes under, potentially overwhelming the state’s Home Building Compensation Fund, which covers up to 20 per cent of the contract cost.

In each state and territory, there are similar schemes run by respective governments that could see the cost to taxpayers balloon even further in the event of a collapse.

Claims of up to $200,000 can be made in Queensland where, so far this financial year, Metricon has undertaken 1006 home construction jobs.

Claims up to $300,000 can be made under the a similar scheme in Victoria, where a collapse of the construction giant would spell chaos.

There, Metricon holds $195 million worth of contracts with the state government, including a five-year deal to build and maintain public housing as part of Victoria’s ambitious “big build” infrastructure program.

In total, Metricon had 6052 homes under construction across the nation in 2020-21.

Its projects in Queensland alone are worth more than $400 million, according to Queensland Building and Construction Commission records.

Acting CEO Peter Langfelder said ongoing rumours were beginning to impact on the company, and Metricon’s owners wanted to demonstrate in real dollars and not just words their confidence in its future.

“We have previously said that our company has a proven history of success and remains profitable and viable and that we have the full support of our key stakeholders,” Metricon said in a statement.

“We have also appreciated incredible support from many of our customers, suppliers and trades – but sadly, this hasn’t been enough to reinstall the complete confidence of the broader industry,” CEO Langfelder said.

“This significant injection of capital by the owners demonstrates to our customers, employees, sub-contractors and suppliers our confidence in the viability, profitability and future of the Metricon business. We hope it may help cultivate a groundswell of support for Metricon, which is a great Australian success story.

“We are so appreciative of the bank’s support – which demonstrates its confidence in our future.”