Metricon taps advisers as home builder fights for future

The country’s largest home builder is meeting with major clients including the Victorian government following the sudden death of founder Mario Biasin.

Houses under construction in Minta Estate Berwick. Picture: David Caird

The country’s largest home builder Metricon was in crisis talks on Wednesday night in the wake of the unexpected death of founder and chief executive Mario Biasin earlier this week.

The building industry was rocked by Mr Biasin’s passing and the company said he had faced mental health issues, which came amid disruptions to the building industry and soaring costs.

Metricon was forced in March to dispel rumours of financial troubles and a number of industry players said that the company had been dealing with issues related to its senior lender, the Commonwealth Bank.

Metricon is set to meet Victorian Treasurer Tim Pallas on Thursday.

Andrews government sources confirmed the company called major clients, including the government on Monday, seeking a meeting to update them on the crisis.

The Victorian government has $195m worth of contracts with Metricon for housing projects, as part of the $5.3bn social housing investment announced two years ago.

Lending figures had told The Australian that Metricon’s issues could be resolved with an injection of private equity rather than loans.

The talks on Wednesday involved the firm headed by Carlton president Luke Sayers, Sayers Group, which had been tapped to help find a way forward for the Metricon empire, senior industry sources said.

Chairman of Sayers Group, Luke Sayers in his offices in Melbourne. Picture: Arsineh Houspian

Mr Sayers’ wealth firm did not return calls and Metricon also declined to comment.

The home builder is one of Australia’s largest and has been buffeted by rising costs and the squeeze on supply chains as well as the fall out on subcontractors from a wave of building collapses around the country.

The company is focused primarily on building houses rather than high-rise apartments and had enjoyed healthy volumes, although last year struggled to fulfil the contracts that were struck before input prices leapt.

The company sought to change some contracts months ago but later reversed its position to allow customers building homes to go ahead at their lower original contracted costs.

Industry players said that both the lender and the remaining shareholders needed comfort about the company’s ability to meet its commitments.

Mario Biasin

Metricon is also seen as too large for the Andrews government to allow to fail as thousands jobs at Metricon, subcontractors and suppliers are a stake.

Metricon employs approximately 2500 staff, primarily in eastern Australia, where it has a pipeline of roughly 4000 homes under construction.

The Herald-Sun reported that company insiders were fearing for its future and that major clients of Metricon, including the Andrews government, would meet company leaders on Thursday.

It reported that internal memos raised concerns about business cash flow and telling staff “it has come to crunch time” regarding unsigned contracts.

The internal turmoil comes during an emotional week for Metricon, with the widespread sadness in building and sporting worlds about the passing of Mr Biasin.

Metricon was last year ranked the nation’s biggest home builder.

Metricon’s acting chief executive Peter Langfelder has denied the company was in financial difficulty.

“We are dealing with ‘business as usual’ issues sensitively because of Mario’s sudden and untimely death,” he said in a statement.

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

“I ask for patience and consideration from our customers whilst our executives and staff deal with their loss.

“We are focused on the business running as smoothly as possible, servicing all our customers and continuing to get homes to site and completed on time.

“We have delivered a message to our team that the goal is business as usual, as Mario would have wanted. However, Mario was a very loved and admired leader of the company he co-founded so it is a sad time for all here at Metricon. As you would expect it may take us slightly longer to manage inquires,” the statement said.