Clough administrators grant another month on to the deadline for Webuild deal
Clough employees face another uncertain month after Italy’s Webuild said it needs another month to decide the bits it will buy.
Employees of collapsed contractor Clough face another month of uncertainty after the latest deadline for a deal with Italian contractor Webuild passed without a firm agreement being reached.
On Thursday Clough administrator Deloitte gave Webuild another month inside the company’s books, saying it had agreed to extend an exclusivity period for the Italian construction major until January 25.
Deloitte had hoped to close a deal for the sale of some or all of Clough’s projects and assets by midnight on Wednesday, but Deloitte partner Jason Tracy said the deadline had passed without an agreement being reached.
“A great deal has been achieved in just over a week, and it’s appropriate that we give Webuild more time to do the work needed to assess opportunities and then execute an agreement,” he said.
Webuild has effectively already taken over Clough’s role in the giant Snowy 2.0 contract, and the bulk of the blue-collar workers are employed and paid by the joint venture partnership.
The Italian contractor said on Thursday it had renewed its commitment to continue to pay Clough’s engineers assigned to the project, and hoped to complete a transaction for other parts of Clough ahead of the new January 23 deadline.
“Webuild has also provided to the voluntary administrators of Clough with immediate funding for the payment of wages to all employees involved on the Snowy 2.0 project, ensuring stability for workforce and project,” the company said.
Last week Webuild agreed to pay $17.6m to buy Clough’s brand name and corporate infrastructure, as well as take over Clough’s role in another joint venture including the two companies over a $3.7bn stretch of the federal government’s inland rail project.
But Thursday’s extension means the status of Clough’s other major contracts remains in limbo, including its role in the $2.3bn Project EnergyConnect transmission line between South Australia and NSW, Mitsui and Beach Energy’s $768m Waitsia gas project in Western Australia, its contract with Energy Australia on the Tallawara gas plant, and a job building the Australian Navy’s Lombrum base in PNG.
Webuild initially agreed to buy Clough on November 8, but walked away from the deal with Clough’s South Africa parent company a month later, triggering the company’s decision to enter voluntary administration.
On Wednesday, Federal Court Judge Katrina Banks-Smith extended the deadline for Deloitte to hold a second meeting of Clough creditors until mid February.
Minutes of the first creditors’ meeting on December 15 show that more than 200 creditors had file claims over debts ahead of the meeting. In addition to claims worth more than $284m lodged by insurance companies and banks over performance bonds extended over Clough projects, the creditors’ list shows a raft of small and medium sized enterprises – some saying they are owed more than $1m.
The documents also show that the Australian Taxation Office has lodged a claim worth more than $20.7m, and the Northern Territory government’s department of infrastructure claims to be owed $2m.