One of Australia's major construction companies. Probuild, which is working on a number of high-profile projects around the country, has collapsed.
Deloitte has been appointed as administrator to handle the company collapse after Probuild's parent company, WBHO South Africa, announced it was withdrawing any financial assistance for the firm.
"We are caught up in a set of circumstances not of our making," a Probuild spokesman said.
Probuild Caulfield Village project. Photo / Supplied
"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."
On Wednesday evening, tradies were called off worksites across the country with workers seen pulling equipment and tools from project sites.
Tradies were photographed collecting tools from Cbus Property's 443 Queen St project in Brisbane.
In Melbourne, at the Far East Consortium's West Side Place project site, which is a $2 billion, four-tower development, subcontractors were seen driving in their private vehicles to collect tools and personal gear.
Victoria University city west tower Melbourne project. Photo / Supplied
The shocking collapse reportedly came after a disastrous high-rise project dragged the company into massive debt.
Probuild raked in $1.3 billion in revenue and made $4 million profit last year, but the 443 Queen St project, which involved high-quality apartments, has haemorrhaged as much as $120 million.
The property features 264 luxury residential apartments, but with delays and technical issues it is already well behind its late-2021 completion date.
Originally heralded as Brisbane's first premium subtropical residential tower, with views across the city, the building's future now hangs in the balance.
The riverfront complex has cost the company's Queensland arm, PCA QLD, more than $28 million, with sources estimating it could be up to $120 million.
Probuild's parent company had also raised concerns about the "troublesome" Western Road Upgrade project in Sydney.
It had forecast a loss of $161 million by June last year and WBHO were forced to fork out$141 million to ensure completion.
Probuild Constructions (Aust) reportedly injected $15 million into the company last year as part of a recapitalisation to combat the Queensland division's losses.
But Probuild's South African parent company has blamed the Australian government's "hardline" approach to managing Covid as part of the problem for the collapse.
443 Queen street Brisbane near customs House CBUS building. Photo / Supplied
It appointed the Deloitte administrators after it had bailed out the Australian construction firm by up to $132.1 million over the past four years.
It said that Probuild had "severely depleted" its resources and the losses from the Australian arm would have a "significant" effect on WBHO's financial performance.
"With effect from 22 February 2022, the company... will no longer provide financial assistance to (Probuild holding company) WBHO Australia," WBHO said in a statement.
The loss of Probuild will send shockwaves through the construction industry as it was one of only a handful of major builders, such as Multiplex, Lendlease, CPB and John Holland, that can complete large scale projects.
Probuild's current list of projects include the Victorian Police headquarters, which is 46 levels high, pharmaceutical giant CSL's global headquarters in Melbourne, the Exchange at Curtin University, alongside the Greenland Centre, which is Sydney's tallest residential building.
Other projects include a 28 level building which will be Melbourne's tallest vertical campus for Victoria University, a 65-level residential building in Melbourne called UNO and Caulfield Village, which was to feature multiple campus style towers, delivering over 430 Build-To-Rent apartments.
In Sydney, Probuild was also in charge of a landmark project in Darling Harbour, a 30-storey building comprising a hotel and serviced apartments, state-of-the-art IMAX Theatre, retail and entertainment spaces and 10,000sq m of renewed and enhanced public domain.
While Probuild directly employs just over 500 staff, there are fears for the impact on thousands more working as subcontractors.
One worker told The Australian that people had been left hundreds of thousands of dollars out of pocket due to unpaid bills.
"It is going to run into the millions, what tradies are owed," they said.
Last year, the federal government blocked the $300 million sale of the company to China State Construction Engineering Corporation, citing national security grounds.
Before the collapse, WBHO had flagged that it would withdraw Probuild from the Queensland and WA markets by the end of the 2022 financial year.
"It was the company's intention to see some decline in the order book as we reduced our exposure to high-risk projects," it told the Australian Financial Review on Wednesday.
"However, sourcing acceptable projects has been made more difficult with procurement activity and the number of available projects being impacted by Covid-19."
It also blamed the government's "hardline stance" when it came to managing Covid, which caused delays to projects but also made it difficult to guarantee new work.
"The Australian government's hard-line approach of managing Covid-19 through a combination of border restrictions, snap lockdowns and mandatory work-from-home regulations for many sectors, has had a considerable impact on property markets as well as other industries such as the leisure industry," WBHO said.
The project that reportedly brought the company undone. Photo / Supplied
"Of particular concern is the project delivery capability of the business which has been negatively affected by unplanned Covid-19 restrictions, the contractual environment and the increased difficulty in raising guarantee facilities necessary to secure new work."
