Australian property developer Bathla Group is facing an imminent collapse, with administrators Teneo preparing to shut down the company by the end of Tuesday. Hopes for a last-minute $20 million cash injection have faded, particularly after a Monday night meeting with lenders failed to secure the necessary commitment. Senior managing director Stephen Longley from Teneo stated that planning for the wind-down of the business would begin by the end of the day, describing the situation as "very dire" and expressing dwindling hope for a "holistic solution to finish the 45 construction projects." Longley had previously been more optimistic, but now acknowledges that securing sufficient funding appears unlikely. The New South Wales government had previously refused a request for $20 million in bailout money.
The developer has accumulated debts exceeding $3.2 billion, and some of its 350 staff have not been paid for eight weeks. Bathla's administration has jeopardized 200 building projects across NSW, encompassing approximately 2,000 homes under construction and another 13,000 in its development pipeline. Additionally, as many as 1,000 customer deposits, some of which may have been utilized by the business as per contract terms, are now in question. Teneo itself had to borrow $1 million from its head office to cover basic operational costs like vehicle registrations and petrol.
In response to the dire situation, some private credit lenders have begun taking control of individual worksites to ensure the completion of specific projects. For instance, PAG has committed to continuing payments directly to contractors for a 312-apartment block development in Pemulwuy, Sydney. However, contractors like Mustafa, who owns a kitchen joinery business, have expressed significant stress, owing money to the ATO, suppliers, and workers, with no clear path forward for other Bathla sites. Ray White Capital, a major lender with approximately $242 million in exposure, has also taken control of two sites, noting that property values for these developments could be up to 15 percent lower than anticipated, drawing comparisons to the global financial crisis. Administrators had previously aimed for a $20 million injection to keep Bathla afloat for another month, prioritizing 45 projects that could be completed by February or March.
