Sydney-based property developer Bathla Group is on the brink of collapse, facing an imminent deadline to secure $20 million in emergency funding. Administrators from Teneo are preparing for the company's shutdown by the end of Tuesday if the cash injection is not materialized. This grim outlook follows intensive discussions with lenders that failed to secure the necessary commitment, and a prior refusal from the New South Wales government to provide a bailout. The company owes an estimated $3.2 billion and has 45 construction projects underway, with a total of 200 projects in New South Wales in jeopardy, affecting about 2,000 homes under construction and 13,000 in the development pipeline.
The situation is dire for Bathla's 350 staff, many of whom have not been paid for eight weeks. Teneo's senior managing director, Stephen Longley, stated that the company has "no cash" and would have to close if funds for payroll, due by Thursday, are not secured. To keep basic operations running, Teneo itself loaned Bathla $1 million for expenses like vehicle registrations and petrol. The administrators had initially sought $20 million from existing lenders and the state government to keep the business afloat for a few months, with a focus on completing 45 key projects by early next year.
The collapse also raises significant concerns for homebuyers, as Bathla Group has taken at least 1,000 deposits, some of which may have been used by the business as per contract terms. While a holistic solution for all projects seems unlikely, some private credit lenders are taking matters into their own hands. For instance, PAG has committed to continuing work on a 312-apartment block in Pemulwuy by paying contractors directly. Ray White Capital, another major lender with about $242 million exposure, has reportedly taken control of two other sites. Contractors are expressing stress over unpaid debts to the ATO, suppliers, and workers, highlighting the ripple effect of Bathla's financial woes.
