Andrew Roberts makes bid to avoid liquidation with $20m staff payment plan

A famed name is heading out of the building industry after pledging $20m to pay staff and make them whole following the collapse of his building company, Roberts Co.

Roberts Co

Tycoon Andrew Roberts has proposed a deal for his collapsed building empire that will see him tip in about $20m to pay staff, but some tradies and larger creditors are likely to be short-changed in the fallout from the construction company’s insolvency.

The son of Multiplex founder John Roberts will exit his costly foray into construction after his Roberts Co companies called in administrators in the wake of major projects blowing out in Victoria.

Mr Roberts has put up a deed of company arrangement for the companies that he is hoping is backed by creditors of both the Victorian arm and the firm’s parent company in order to stave off a liquidation process. That could probe claims of insolvent trading and him being a shadow director of the fallen companies, both of which were surfaced in a report by McGrathNicol, and which Mr Roberts denies.

The creditors will vote on the proposal at meetings to be held next Monday for both the Victorian arm, which fell into the hands of McGrathNicol, and the parent company of the top tier construction player, which is under the control of FTI.

Andrew Roberts

The collapse shook the industry as work on a series of sites in Victoria halted – some have since restarted – and it shone a light on the ongoing difficulties in handling cost blow outs and disputes between large developers and builders.

A report by administrators McGrathNicol blamed the collapse on heavy losses on key projects, including the building of an Amazon distribution centre in the Melbourne suburb of Craigieburn, which was forecast to generate a $56.1m loss.

While new builders have been lined up for the key projects in Melbourne that led to the firm’s demise, the fallout could be deeper if creditors reject the deeds of company arrangement put forward by Mr Roberts and vote to put the companies into liquidation.

The McGrathNicol report said that Mr Roberts may have acted as a shadow director of the collapsed Victorian entity, alongside a key executive, as he provided strategic advice and was involved in key decisions. In denying this, he told administrators that his involvement was only as a “shareholder representative”.

Amazon facility in Craigieburn. Picture: Jake Nowakowski

The administrators also said the Victorian arm had traded insolvent since last December and a liquidator could lodge a claim worth up to $40m. Mr Roberts will be hoping that creditors accept the deeds and has been working behind the scenes on the plan, which has won the backing of both administrators as it would give creditors a better outcome than liquidation.

The deeds of company arrangement are conditional upon a resolution being passed by the creditors of each company, and the Victorian entity will only enforce any judgments awarded up to the value of its insurance policies.

Both sets of administrators noted potential claims of $27m against Mr Roberts’ private trust relating to unpaid capital on shares. The head company’s directors did not call on this until March 20, when the Victorian arm was already in administration.

Mr Roberts’s Martigues entity declined the request for funding, partly because it was not sure the builder was cash flow positive and profitable. The availability of the uncalled capital was discussed at a board meeting in February but was seen as a last resort.

Staff and small creditors would be paid in full and subcontractors and other trade creditors would be paid between 32.1c and 57c in the dollar. Unsecured creditors would only get between 3.3c and 31.8c in the dollar in a liquidation.

The administrators said Roberts Co’s purchase of Probuild’s Victorian operations, including Monaco Hickey, after its collapse in 2022, was a failure. But the withdrawal of support from its parent and Mr Roberts was also critical, McGrathNicol found.

Originally published as Andrew Roberts makes bid to avoid liquidation with $20m staff payment plan