Clough owners weigh up options for construction company

Clough is understood to have a $300m loan from HSBC and is believed to have been in dispute with the government over its work on the Snowy 2.0 project.

Clough is the latest construction company coming under intense scrutiny by the insolvency and restructuring industry, with suggestions an investigative accountant has been appointed.

Sources say FTI Consulting had been hired by Clough to zero in on its financial state.

Law firm Ashurst is also said to be hanging around, while KordaMentha is understood to be working on a situation involving a major West Australia-based construction company, and sources believe it’s Clough.

The company is owned by the South Africa-listed Murray and Roberts which is believed to be weighing its options, including withdrawing its support.

Clough is understood to have a $300m loan from HSBC and is believed to have been in dispute with the government over its work on the Snowy 2.0 project.

Clough and Salini were awarded a $5.1bn contract for the civil and electric-mechanical works.

The scheme links two existing Snowy Scheme dams, Tantangara and Talbingo, through underground tunnels up to 1km deep and an underground power station with pumping capabilities.

It’s designed to add 2000 megawatts of energy generation and provide 175 hours of energy storage for the National Energy Market.

The Perth-based Clough was established in 1919 by John Clough. It is believed to have about 6500 employees in Australia, Asia, Britain and North America.

Clough remains under a cloud after the collapse of Probuild this year.

Probuild was an Australian subsidiary of a South African parent company, Wilson Bayly Holmes-Ovcon (WBHO).

Probuild was one of the country’s largest builders but collapsed after WBHO refused to offer further financial assistance.

It had 19 projects throughout Australia, and its 700-plus employees are owed at least $14m.

Its Victoria business was purchased by Roberts Co while SRG Global purchased WBHO Infrastructure’s West Australian business.

Probuild had been struggling for some time.

Its collapse came after its 47-storey waterfront apartment project at Brisbane’s 443 Queen St had been plagued by delays, and there was talk in the market that it racked up losses of about $300m.

It comes at a time that builders are expected to come under further pressure in the months ahead, in an environment of higher wages and expensive shipping, as well as with higher interest rates.

This is particularly the case for builders working on jobs priced before costs started to escalate, where they are unable to pass them on to customers.