Lawyers tell Federal Court that Probuild collapse is a ‘nightmare’ as workers owed $14m, more creditors surface

The failed builder owes huge amounts to more than 2300 creditors as administrators tell a court it’s a ‘nightmarish’ scenario ahead to salvage the firm.

Probuild owes workers $14m and untold amounts to more than 2300 creditors as administrators concede they face a “nightmarish” scenario in salvaging the company’s projects.

Deloitte, the administrators of the collapsed building giant, told the Federal Court on Wednesday that 786 workers across 19 projects were out of pocket after Probuild collapsed last week.

Deloitte was successful in seeking a 21-day extension of time to further investigate the extent of the company’s liabilities and what property will be needed to keep the company operational.

Deloitte is arguing that the best case scenario is to keep the company operating as a “going concern” as a buyer was sought.

Several major builders including Multiplex are understood to be chasing the opportunity thrown up by the collapse of the construction giant. The Australian’s DataRoom column reported Italian group Webuild – previously known as Salini Impregilo – was also eyeing the firm.

Webuild, headquartered in Milan, specialises in civil engineering and construction and was formally founded in 2014 as a result of a merger by the incorporation of Salini into Impregilo.

It is the largest Italian engineering and general contractor group and a global player in the construction sector, remaining active in more than 50 countries, including Australia.

Hamish Austin, acting for Delotte, told the court that administrators needed time to determine ownership of everything from scaffolding to buildings.

“It is mind boggling the amount of work to get across this type of administration,” Mr Austin told the court. “It is nightmarish when you consider you have construction projects in real time ongoing and where any delay is likely to be extremely costly.”

Workers leave the Probuild worksite on 443 Queens St. Picture: Zak Simmonds

Mr Austin told the court that an 300 additional Probuild creditors had been located on Tuesday with some unaware of a planned meeting this Friday to discuss the administration. He added access to Probuild’s site in Brisbane and Sydney had been hindered by flooding. “It really has turned into a perfect storm,” he said.

Federal Court judge Jonathan Beach granted the extension of time for the investigations noting similar extensions granted during the collapse of Virgin Australia in 2020. The first meetings of creditors will be held on Friday.

Justice Beach said the administrators did not yet know what parts of the Probuild business would be sold or recapitalised and therefore which of the companies’ existing leases would be required for that purpose.

Administrators were last week appointed to Probuild, one of the country’s largest builders, after its South African parent pulled the pin on further financial support to the troubled Australian arm.

Johannesburg-based Wilson Bayly Holmes-Ovcon said last Wednesday it was withdrawing further funding to its Australian operations and would commence proceedings to place the business into administration.

Hundreds of workers were seen pulling equipment and tools from constructions sites ahead of the decision to bring in administrator. Mr Austin told the court WBHO had effectively “washed its hands” of Probuild.

Deloitte has called for urgent expressions of interest for the recapitalisation or sale of all or part of the assets and operations of Probuild and diversified engineering and infrastructure provider WBHO Infrastructure.

The Australian has learnt that Canadian-owned Multiplex is chasing a parcel of at least three major Victorian construction jobs which Probuild was working on.

Many of Probuild’s largest projects, including a planned 65 -storey apartment known as UNO Melbourne, and the West Side Place apartment and hotel complex, are in the Victorian capital.
Multiplex declined to comment.

Probuild’s 443 Queens Street project. Picture: Zak Simmonds

The privately owned Roberts Co is also believed to be chasing a number of large projects in Victoria to bolster its pipeline of work. It declined to comment.

Scott Hutchinson, the chairman of Australia’s largest private construction company Hutchinson Builders, last week said his firm would be interested in taking on incomplete projects but it was too early to make any decisions.

The collapse of one of Australia’s largest construction groups is expected to have a knock-on effect on the broader economy.

It also leaves in doubt up the immediate future of $5bn in Probuild construction projects across the country — including the future headquarters of global biotech company CSL, the next stage of US equity giant Blackstone’s build-to-rent apartment development in Melbourne, The Towers at Elizabeth Quay in Perth and the 450-room W Hotel on Darling Harbour in Sydney.