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More than 200 staff have been stood down from the collapsed Bathla Group after a weekend of crisis talks, as administrators confirmed construction on developments in Sydney would be suspended.
Bathla said in a statement on Monday that it had reached a short-term funding agreement with five lenders to enable limited operations to continue for a further two weeks, but 213 staff had been stood down and “construction on other projects will be suspended today”.
Administrator Stephen Longley said: “Our immediate priority has been to secure sufficient short-term funding to maintain a minimum viable operating structure.
“The arrangements agreed today allow us to provide the central support required for construction to continue on projects associated with the lenders participating in the funding package. Significant work remains to secure the funding required to progress and ultimately complete all projects currently under construction. We will continue to work closely with lenders and other key stakeholders to pursue those arrangements.”
One Bathla employee leaving the company’s Girraween headquarters on Monday said he had not been stood down, but other staff had been. He did not confirm how many employees no longer have work and said he remains “positive” about Bathla’s future.
Premier Chris Minns said on Monday the state government was “in discussions with the administrator” and noted payroll was met last week.
“There is still prospect for either the breaking up of the company and other parties stepping in to grab a piece of it and complete the works,” he said.
“So I think that there’s an important process to take place before a line of credit or public money is extended to the company. And the reason today is it’s not my money; it’s public money.”
On Friday, it was revealed that Bathla Group owes at least $3.4 billion and administrator Teneo told creditors that “positive discussions” were continuing with five of the company’s 43 lenders to gain funding to keep construction going.
If the five lenders commit funding, work on its projects will continue, but Teneo would not fund the projects the other lenders are involved in, stopping construction on those sites.
Preliminary figures provided at the first creditors meeting on Friday show Bathla’s debts include $3.08 billion to lenders, $145 million to the Australian Tax Office, $130 million to other unsecured creditors and $42 million in land tax. Debts will “go up and down as time goes on”, administrator Teneo said.
Bathla Group – and its 542 individual entities – entered into voluntary administration on August 24. Teneo was last week desperately negotiating with lenders to secure short-term funding to stave off liquidation.
“The group, as I said, from day one, has had literally no cash,” Teneo’s Andrew Scott said on Friday.
“So we’ve been really focused on raising liquidity to provide short-term funding to obtain immediate funding to pay things like wages and other critical operating expenses.”
The company owes $4 million to its employees. Teneo said on Thursday it would provide Bathla’s staff with a partial payment, covering wages accrued from when administrators were appointed.
Bathla has 45 projects under construction in NSW set to deliver about 2500 homes, but administrators said the developer also has a significant land bank holding, at various stages of development.
The administrator is also seeking to prevent the suspension of Bathla Group’s building licences by Building Commission NSW, which issued the notice of intention after the company entered voluntary administration. If the developer goes into liquidation, the licenses would be automatically cancelled.
Later on Friday, the state’s building regulator hit Raj & Jai Construction, a related entity of Bathla’s, with a building work rectification order to fix seven serious defects at an apartment building in Seven Hills.
It comes after Building Commission NSW issued a prohibition and building work rectification order on Thursday for Bathla’s Kembla Grange development – a key project that would provide 108 units and is already 80 per cent sold.
Prior to the collapse of Bathla, the commission confirmed it had completed more than 40 inspections of the group’s sites over the past few months. When the Herald asked Bathla about these inspections last month, a spokesperson said the company’s records indicated the agency had only conducted five inspections “with no issues noted”.
With Max Maddison
Ellie Busby is a Parramatta reporter at The Sydney Morning Herald.Connect via X or email.
Anthony Segaert is the Parramatta bureau chief at The Sydney Morning Herald. He was previously an urban affairs reporter.Connect via X or email.From our partners
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