Roberts Co bondholders chase payment amid claims of misusing safe harbour provisions

The Roberts Co operation remains in limbo with major projects stalled but founder Andrew Roberts wants a clean exit via a deed of company arrangement that would see employees paid in full.

Andrew Roberts, when CEO of Multiplex Constructions, is planning a deed of company arrangement for Roberts Co.

Tycoon Andrew Roberts will propose a deed of company arrangement for his collapsed building empire covering both the holding company and the Victorian arm whose heavy losses forced him to exit the industry.

The holding company, which called in voluntary administrators FTI last month, disclosed at a Sydney meeting that it was facing claims from more than 265 creditors that amounted to more than $100m.

FTI administrator Vaughan Strawbridge told the meeting of creditors of holding entity RCAH Pty Ltd that the tycoon was planning a deed of company arrangement and the firm went to court on Monday seeking an extension to their next meeting. This will give Mr Roberts time to prepare a plan that also covered the Victorian business, which is separately under the control of administrators McGrathNicol.

Mr Roberts has effectively stepped away from the business that he founded in 2018 after cost blowouts on Victorian projects. But he is planning a deed that would cover employees and aiding the shift to new builders on Melbourne projects that remain in limbo.

Roberts Co. Picture: Supplied

The claims on the head company mainly come from bond providers linked to the stalled projects in Victoria and they are seeking about $57.9m all up. Some of the claims are expected to be disputed.

Creditors at the meeting demanded that administrators FTI investigate the conduct of the company, alleging it had gone into safe harbour and then administration in order to avoid its responsibilities.

Randell Fuller, of Randell Fuller and Associates, said it was “clear” that Roberts Co had put corporate entities into voluntary administration and safe harbour to “primarily block creditors from making claims against parent company guarantors”, according to minutes lodged with regulators.

“This seems like a tactic to avoid responsibilities elsewhere,” he told the meeting. “I think we all want to be vigilant to make sure we are not disadvantaged. We know that the organisation and their shareholder does have the money to pay us and he needs to be held to account,” he said.

Mr Strawbridge said the issue went to the “heart of the administrators’ report and their investigations”.

FTI sought an extension up to the end of July to report to creditors and to tie the timing of the meeting to when a second one is held for the Victorian arm. Creditors could either accept Mr Roberts’s deed of company arrangement or vote to put the companies into liquidation.

Roberts Co’s NSW business has been separately sold off to Middle Eastern company Arada, which has flagged plans to expand.

RCAH was effectively the holding company for the group with RCO Aus acting as the parent company for the trading portion. RCO also gave parent company guarantees on some projects and some bondholders have guarantees from group entities which have been called.

A deed cross guaranteeing all debts is also in effect until August 12 but the administrators hope to sort out a plan before then. “We currently anticipate the decision on the future of the companies would be made prior to August 12, so the expiry of the cross guarantee may not be an issue,” Mr Strawbridge told creditors.

Roberts Co had sought to revoke the cross guarantee in February amid problems in the Victorian business, which put a six month time limit on the guarantee.

RCAH is facing priority and employee creditor claims of $6.5m. Mr Strawbridge said he had had “preliminary discussions” with Mr Roberts about a DOCA proposal which would see employee entitlements paid in full.

Creditors told the meeting that a series of loans were made “to buy time to shuffle off some parts of the business” and then make some staff work out their notice. Mr Roberts has flagged putting in money to enable employees to get their redundancies, annual leave and long service leave paid out.

Mr Strawbridge is also looking into an unpaid $27m capital call made by RCO Australia on RCAH. He said administrators were aware of the capital call, which sources close to Roberts have flagged would not be available in an insolvency.

“The administrators are investigating this to determine if there is a potential action. [Mr Strawbridge] noted that the administrators have the ability to recover funds should they be due and payable,” the minutes of the meeting said.