Rumours of recapitalisation for Art Gallery of NSW builder Richard Crookes Constructions

Major construction works have almost been completed at the Art Gallery of NSW. NSW. Picture: NCA NewsWire / Monique Harmer

Sydney builder Richard Crookes Constructions is the latest subject of chatter in the building industry, with suggestions it has recently undergone a recapitalisation.

The builder has been wrestling with cost blowouts on the Art Gallery of NSW, sources say.

The family-run company has traditionally had a solid reputation among its suppliers, but cost overruns are being felt across the market.

While there have been suggestions that the family owners of the business may have been contemplating a wind-up of the operation, that is no longer on the cards.

The builder is run by executive chairman Richard Crookes and managing director Jamie Crookes.

Sources have told DataRoom that the firm has had an equity injection in the order of $50m to $75m.

One view is that Richard Crookes is a tier-two builder taking on an ambitious tier-one project in the form of the art gallery development.

The gallery is developing a new standalone exhibition space north of the existing gallery in Sydney’s Domain, partly extending over the Eastern Distributor land bridge.

It has exhibition space, roof terraces, landscaping and services infrastructure.

Other builders have also been weighing up their options in the tough operating environment.

Multiplex has hired Morgan Stanley as it wrestles with cost blowouts on the Star Entertainment casino project in Brisbane.

Engineering firm Clough has been working with insolvency firm FTI Consulting, and has been considering various options since May.

This follows payment disputes and cost blowouts on the Snowy 2.0 project, which it is working on with Italian builder WeBuild.

Builders have been feeling the pain from price rises for products and higher labour costs since the Covid-19 shut downs ended.

However, they have been unable to pass on the higher costs thanks to fixed-price contracts being in place since before the pandemic.