Probuild, one of Australia’s largest construction companies, is on the verge of collapse.
Probuild’s Johannesburg-listed majority owner Wilson Bayly Holmes-Ovcon said it will no longer provide financial assistance to the construction firm, and has called in administrators.
A Probuild spokesperson confirmed that Deloitte had been appointed. The company’s board, which includes Eric Meyerowitz, Brad Duggan, Nick Gaurdry, Joe Gianfriddo and Luke Stambolis, indicated they are working to keep Probuild afloat.
“We are caught up in a set of circumstances not of our making.
“We are working closely with the administrator on a number of plans to protect our clients, subcontractors and employees.
“The Probuild brand is strong and we intend to keep it that way. We have several options for raising the necessary capital to continue as a premium Australian building company.
“These will all be pursued.”
Construction workers and subcontractors working on billions-of-dollars worth of development sites across the country were told to down tools on Wednesday.
While the root of the company’s difficulties have not yet been made clear the builder is understood to have been hit with a $50 million loss on the $350-million project it is building for Cbus Property in central Brisbane.
The 47-level, 264-apartment project on the city’s riverfront, at 443 Queen Street, has been haemorrhaging money over the past two years, impacted by stop-start construction conditions and site limitations throughout the pandemic.
Probuild recorded revenue of $1.3 billion last year but recorded a narrow profit of just over $4 million.
Probuild, a tier-one builder, competes with the construction giants Lendlease, John Holland and Multiplex for major projects.
The Melbourne-based company was established in 1987 and currently has more than 500 employees operating in Victoria, NSW, Western Australia, and Queensland.
The company is headed up by managing director Luke Stambolis who was appointed to the role in October 2019 having served the business in a number of roles since 2013.
Its national pipeline of projects is worth around $5 billion.
It has delivered high-profile developments including the Melbourne Convention Centre and Victoria Police’s new headquarters at 311 Spencer Street as well as Grocon’s 25-storey hotel, The Ribbon, on Sydney’s Darling Harbour and Sydney’s tallest residential tower the $400 million Greenland Centre.
The $2-billion project, constructed for Singapore’s Far East Consortium, features four-towers—the tallest of which has 81 floors—and includes a new luxury Ritz Carlton hotel. Multiplex is overseeing the delivery of the project’s second stage.
The construction giant would be the largest casualty of Australia’s volatile construction sector after fellow Melbourne builder ABD Group wound up work on three high-profile projects in late November.
Brisbane-based homebuilder Privium Group—known as Impact Homes for 22 years until its re-brand in 2019—also went into administration with debts of $28 million.