Metricon denies solvency issue as it prepares for government talks

Australia’s biggest home builder, Metricon, has downplayed concerns about its solvency as it prepares to meet with creditors, including the Victorian government, following the sudden death of founder and chief executive Mario Biasin.

The Andrews government, which has $195 million worth of social and affordable housing projects with Metricon, confirmed it would meet with the builder on Thursday. Some of the projects have been completed, while others are under construction or awaiting work to start.

Metricon has sought a meeting with the Victorian government, which said the home builder was under financial pressures.Credit: Nine

Metricon is Australia’s largest home builder, reporting 6052 new home starts over 2020-21, up from 4534 in the previous year.

The group has about 2500 employees and 4000 houses under construction.

Rumours have swirled in business circles for the past two months that Metricon may be considering ways to repair its balance sheet amid rising costs of materials and project delays.

However, Metricon’s acting chief executive, Peter Langfelder, said there was “simply no basis to these rumours” or to doubt the company’s financial health.

“Metricon is a strong, viable business without any solvency problem,” Langfelder said.

He said the company was dealing with its regular business issues more sensitively because of the sudden death of 71-year-old Biasin, who had been experiencing mental health issues, according to the company.

“Mario was much loved and admired and his loss has been heartfelt by many of the Metricon family. No one plans for these things,” Langfelder said.

“I ask for patience and consideration from our customers whilst our executives and staff deal with their loss. As you would expect, it may take us slightly longer to manage enquiries.”

A state government spokeswoman confirmed Metricon had sought a meeting earlier this week. She said Metricon did not seek a bailout but indicated the company was under financial pressure.

Sources aware of Metricon’s financial situation said the group was yet to engage with any insolvency specialists.

The Commonwealth Bank generally prefers for its distressed clients to work with advisory firm KordaMentha in the event of an administration. A spokesman for the bank declined to comment.

Industry sources said Metricon has been seeking to buy back contracts from clients that had been struck before the cost of goods, labour and materials shot up as a result of inflationary pressures and supply chain constraints.

They said there was hope the company would be able to renegotiate some larger contracts to reflect the significant increase in costs.

Inflation and supply chain issues have hit the construction industry particularly hard. One of the nation’s largest construction companies, Probuild, appointed administrators earlier this year after it collapsed.

Biasin told The Age in December that global supply chain hold-ups were extending the time it took to build a regular 200-square-metre, single-storey home by a month. He said he had never seen a situation like it in his nearly 50 years in the industry.

Master Builders Victoria chief executive Rebecca Casson said Biasin was an exceptionally strong advocate for the industry.

“During the pandemic, Metricon was a lead supporter in MBV’s COVID-19 advocacy campaigns to ensure the Victorian building and construction industry remained safe and open for businesses, safeguarding hundreds of thousands of jobs.

“Mario’s passing leaves an enormous void in our industry, and he will be greatly missed by Master Builders Victoria,” Casson said.

She warned about a “rumour narrative” being created about Metricon’s future and urged clients and suppliers to be supportive as “they navigate through these unprecedented challenges”.

Graham Wolfe, managing director of the Housing Industry Association, described Biasin as a “genuine gentleman”.

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