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Collapsed major Sydney developer Bathla Group appears to have staved off the immediate threat of liquidation, after its administrators extended a self-imposed deadline for $20 million in funding from the group’s private lenders for another 24 hours.
Teneo was appointed after Bathla entered voluntary administration last week owing debts of more than $3.3 billion. The administrators had been negotiating with the dozens of private lenders who had propped up the company over years to obtain short-term funding to pay 350 staff and complete almost-finished construction projects.
It had initially set a deadline of Thursday, the payroll deadline for Bathla’s staff who haven’t been paid for eight weeks. But on Tuesday morning, Stephen Longley, a senior managing director at Teneo, told Nine’s Today program that his administrators would begin wrapping up the company by the end of the day. He warned Bathla’s financial situation was “very dire” and the administrators were running out of hope to find funding to complete the 45 projects under construction.
Negotiations to save the developer will now continue until Thursday.
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Teneo’s immediate priority remains meeting Thursday’s payroll deadline for Bathla’s 350 staff, who haven’t been paid for eight weeks.
The company, which built mainly greenfield housing in Sydney’s north-west and throughout the state, had been in financial peril for months as the quality of its building was interrogated by Building Commission NSW.
The NSW government on Tuesday backed its decision to not bail out the company. Treasurer Daniel Mookhey, speaking while in New Delhi on a trade trip on Tuesday afternoon, called on the private lenders to step in to support the administrators, saying it was not fair to ask taxpayers to bail out the companies that “took the risk”.
“The first obligation belongs to the private credit firms,” he said. “These are some of the most sophisticated lenders in the Australian economy. They took the risk. The onus is on them to step up and support the administrators.”
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Premier Chris Minns, also on the trip, said he was concerned about the risk of contagion across the construction industry as a result of the collapse but stood by the decision not to bail the company out.
“I am concerned about it. Like most volume builders, they use a range of contractors as part of their building, so we’re keeping an eye on that,” he said.
“[But] they effectively asked for a line of credit from NSW taxpayers, and it’s not my money; it’s NSW taxpayer money. And I wasn’t convinced that that was the best use of taxpayer money, particularly as we didn’t have a detailed or deep understanding as to how Bathla got into these circumstances in the first place, and what the exposure would be for NSW taxpayers if we did tip money in.
More to come.
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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.AdvertisementAdvertisement