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Creditors to Sydney-based St Hilliers Contracting have been told that the company has exposure to more than $40 million in debts following the collapse of the construction group, with a quarter of that owed to contractors and suppliers.
The first creditors meeting held today for the construction arm of residential and commercial developer St Hilliers revealed more about the company’s financial position after administrators were appointed earlier this month.
Administrators Glenn Livingstone and Allan Walker, of WLP Restructuring, today told creditors that they have recovered all of the company’s cash at bank and are attempting to collect the balance of unpaid debtors and payment claims which are owed to the company.
Unsecured creditors such as suppliers and subcontractors are owed $7.1 million, although that figure could top $10 million pending the receipt of invoices for January.
A further $2 million is owed in employee entitlements to staff members who have already made redundant.
The administrators, who were appointed to seven companies within the St Hilliers Contracting division, previously revealed that 22 staff were made redundant, leaving about 80 still employed by the group.
The administrators also have clarified that the group's property development and investment division, St Hilliers Property, is not in administration.
While a quarter of the group’s potential $40 million in debts is owed to subcontractors and suppliers, $16.6 million of this total has been classed as a potential retention amount owed by the company on projects currently under way.
Retention amounts are held as security to cover the failure by subcontractors to complete a job and to allow for the rectification of defects on projects.
However, parts of the retention amount are not yet owing as not all of the projects on the company’s books have reached the practical completion stage.
The administrators have revealed that St Hilliers has cash of $2.5 million held in trust accounts to partially offset this potential retention debt. They are working with a number of clients and the Queensland Building and Construction Commission to determine the claims on these trust accounts.
St Hilliers Contracting also carries the risk of cash-backed bank guarantees totalling $13.5 million which the administrators are understood to be attempting to release on projects already completed.
The appointment of administrators on 4 February led to a halt on construction of 21 active construction sites under way by St Hilliers with half of them being undertaken for the Department of Defence.
Among these is a sewerage treatment plant for the RAAF’s Amberley base along with armoured fighting vehicle facilities programs at Puckapunyal and Lavarack.
Other projects include AVEO Carindale Stage 3, Bernborough Ascot and Ascot Grove Care Community in Brisbane, the Kirwan Health Campus expansion in Townsville, and a refurbishment and expansion of the Stanthorpe Library and Art Gallery.
Hilliers director Tim Casey is reported to be seeking to keep the business alive with plans for a deed of company arrangement (DOCA) to be put before creditors at their second meeting. It is understood that a DOCA is aimed at salvaging 19 of the 21 projects on the group’s books.
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