Probuild collapses into administration, 750 jobs in limbo

At least 750 Probuild employees and numerous tradies and contractors across Australia are facing an uncertain future after multiple businesses connected with the construction firm collapsed into voluntary administration.

Global consulting firm Deloitte confirmed its restructuring partners had taken control of 18 companies linked to Probuild’s parent company, WBHO Australia Group.

Workers gathered items before leaving the UNO Melbourne site in the CBD on Thursday morning.Credit: Wayne Taylor

The Australian arm of WBHO is controlled by South African-based Wilson Bayly Holmes-Ovcon Limited, which has withdrawn its financial support for the Australian business.

A Probuild spokeswoman said the local arm of the business was “abruptly informed by parent company WBHO South Africa that all cash and securitisation support would cease”.

“We are caught up in a set of circumstances not of our making,” she said.

“The Probuild brand is strong, and we intend to keep it that way. We have several options for raising the necessary capital to continue as a premium Australian building company. These will all be pursued.”

Melbourne-based Probuild has at least 18 projects under construction across the country, including about $5 billion worth in Victoria.

Tradies packed up tools on many of the firm’s sites on Wednesday amid concerns it was facing collapse.

Ian Ferguson, a Perth-based contractor with Mechanical Project Management, said his firm was $890,000 out of pocket after working on Probuild’s Curtin University project.

Mr Ferguson said Probuild was hit with substantial penalties for COVID-19 delays not covered by force majeure or unavoidable catastrophe clauses in its contracts.

It then passed those penalties on to its subcontractors.

“The people that are bearing the brunt of it are the guys on the ground. It leaves a huge hole in my cash flow,” he said.

WBHO issued a statement blaming Australia’s hard-line approach to managing COVID-19 for the “considerable impact” on property and leisure markets.

“The impact of lockdown restrictions ... have created high levels of business uncertainty in Australia and have significantly reduced demand and delayed the award of new projects,” the statement read.

Workers at Pro Build’s Ribbon Project site at Darling Harbour Thursday.Credit: Brook Mitchell

There were hints of Probuild’s precarious financial situation last January, when the company was left disappointed by the federal government’s decision to torpedo a near $300 million takeover bid by one of China’s largest construction firms.

Work on the builder’s numerous projects is likely to stall until the administrators determine what funds are available to proceed. The individual businesses may be either recapitalised, sold or wound up. Irrespective of those outcomes, the owners of the buildings presently under construction are facing a major headache and potentially significant delays and cost overruns.

Deloitte’s lead voluntary administrator, Sal Algeri, who was also one of Virgin Australia’s administrators, said his team’s immediate focus would be to urgently assess the businesses’ financial positions and work with stakeholders to stabilise the business and projects where possible.

Cost overruns on a Brisbane tower Probuild was constructing for Cbus Property at 443 Queen Street are understood to be a key factor in the firm’s troubles.

Probuild’s projects in Melbourne include the future 16-storey headquarters of biotech giant CSL in North Melbourne, the 430-apartment Caulfield Village, the 65-level residential tower UNO Melbourne, a 29-level Victoria University campus in the CBD and West Side Place, the city’s largest residential project with 2895 apartments.

The headquarters of CSL, which handled domestic production of the AstraZeneca vaccine, would include nine floors of laboratories and research suites as well as seven office floors.

A CSL spokesman said it intended to work with Deloitte, Probuild and other stakeholders to mitigate any disruption to the “well advanced” project.

“CSL remains focused on completing the building to take occupancy of this landmark facility for the Melbourne biomedical precinct in early 2023,” he said.

The builder is also constructing Greenland Centre, Sydney’s tallest residential building andthe W Hotel, owned by Marriott International, at Sydney’s Darling Harbour, which was due to open in November this year.

As well as the 450+ room luxury hotel, “The Ribbon” is supposed to act as a landmark of the revamped Darling Harbour precinct, including the return of the IMAX theatre.

A spokeswoman for the W Hotel said: “We are aware of recent news around Probuild and understand that projects are on hold. We are currently in discussions with our owners and are committed to ensuring our hotel projects move forward. As discussions are currently ongoing, we are not in a position to comment further at this time.”

Victorian Premier Daniel Andrews said his government was open to discussing support for Probuild.

“All of us should want that business to succeed. So, if there’s anything we can do as part of that process – noting that it’s a for-profit, private company – we are always happy to try and provide support. And that can take many different forms,” Mr Andrews said on Thursday morning.

Shadow treasurer David Davis said the state’s prolonged lockdowns “cannot have helped” Probuild’s situation.

The Construction, Forestry, Maritime, Mining and Energy Union released a brief statement saying it was seeking information from Probuild on the situation and the impact on workers.

Eight Probuild-named companies registered in all of Australia’s mainland states are on Deloitte’s list of companies in voluntary administration. Other companies facing uncertainty include WHBO Infrastructure, Contexx, Prodev Murphy, Monaco Hickey, Northcoast Holdings and Carr Civil Contracting.

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