"Absolutely devastated": Condev appoints liquidator as builder hit by financial tsunami

"Absolutely devastated": Condev appoints liquidator as builder hit by financial tsunami

Gold Coast-based commercial and residential building group Condev Construction was officially placed into liquidation today after the company failed to win the support of its developer clients to continue operating.

Condev, a prolific building group with operations across the residential, commercial and government sectors on the Gold Coast and Brisbane, has succumbed to a tsunami of events led by cost blowouts facing the construction industry.

The appointment of Worrells' Jason Bettles and James Robba as liquidators comes hard on the heels of the collapse last month of Melbourne-based construction giant Probuild, a company with 750 employees and annual revenue of $1.4 billion.

Condev’s troubles emerged publicly last weekend when it was revealed the company had asked its clients for up to $25 million to continue operating.

The company, founded and led by Steve and Tracy Marais, this week revealed that rising construction costs of nearly 25 per cent over the past 18 months had combined with supply chain issues and delays from the recent floods and rain, on top of COVID-19, to put the squeeze on profitability.

Compounding the issue has been wafer-thin margins for the group which is understood to have approached its developer clients early this month for relief as the rising cost of materials ate into any profits it may have achieved.

Condev founders Steve and Tracy Marais in happier times.
Condev founders Steve and Tracy Marais in happier times.

 

Condev has about 18 active projects in Queensland worth about $1 billion, including Spyre Group’s Natura high-rise development at Burleigh Heads and Homecorp’s Capital Court build-to-rent project at Varsity Lakes. It is understood all of its developer clients have taken on the task of completing the projects.

An emotional Steve and Tracy Marais today revealed they were unable to find a resolution with developers as planned, leaving them no other option but to appoint a liquidator.

“We are absolutely devastated for the Condev family of employees, our tradespeople and our affiliates,” says Steve Marais.

“Unfortunately, we were not able to reach the unanimous support we needed to keep the business operational in the future.”

The couple is being represented by lawyer Derek Cronin, of Cronin Miller Lawyers,.

“Our clients have considered that the only option open to Condev is to appoint a liquidator to manage Condev’s affairs,” says Cronin.

“Although we are instructed that the company is currently solvent, the decision was made based on forward projections dictated by increasingly challenging market conditions including the exponential rise in material costs.

“This has been extremely stressful for Steve and Tracy who are highly regarded in the industry and the Gold Coast community as tier one corporate citizens.”

Condev earlier this week revealed that all sub-contractors had been paid in full on every project. Some sub-contractors had been with the company for the past 10 years.

Condev also operates a charity arm, Condev Cares, which has become another victim of the group’s collapse.

“Their charity arm Condev Cares has raised hundreds of thousands of dollars over the last decade for those in need in addition to being an employer of choice, and it is just simply a sad time for the industry generally,” says Cronin.

Worrells clarifies the company has in excess of 100 employees whose outstanding entitlements are expected to be paid in full, while the numerous subcontractors, suppliers, and other trades working with Condev outside its permanent employee base would need to provide proof of being creditors during the process of liquidation.

"The directors have agonised over this decision. Their staff and contractor relationships have been at the centre of each discussion to evaluate what this decision’s impact will have on them," says Bettles, whose firm is calling for all creditors to lodge proofs of debt via the Worrells website portal.

"We understand and appreciate the impact this has on everyone involved, the broader community, and the construction industry.

"It’s difficult to see that it has come to this point and the emotional toll it’s having. Our teams are doing everything they can to support everyone to understand the process currently underway, with the sensitivity and compassion it deserves."

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