Collapsed Sydney developer Bathla Group owes creditors about A$3.4 billion (£1.7 billion), administrators have revealed, as they race to secure emergency funding before construction on some projects is halted.
Teneo told Bathla’s first creditors’ meeting on Friday that negotiations were continuing with five of the group’s 43 lenders. The administrators have set Monday morning as the latest deadline for securing enough cash to keep parts of the business operating.
Andrew Scott, a Teneo administrator, said the group had “literally no cash” when it entered voluntary administration last week.
“We’ve been really focused on raising liquidity to provide short-term funding to obtain immediate funding to pay things like wages and other critical operating expenses,” he said.
Bathla Group debt continues to rise
Preliminary figures show A$3.08 billion is owed to secured lenders, while the Australian Taxation Office is owed about A$145 million. A further A$130 million is owed to other unsecured creditors and A$42 million in land tax remains outstanding.
Bathla also owes about A$4 million in wages and superannuation to employees. The figures remain subject to change as administrators examine the finances of the 542 entities placed into administration.
Teneo said the group’s 219 sites had a preliminary stated value of about A$4.9 billion, but warned that much of that value was tied up in land and developments rather than cash that could immediately be used to pay debts.
About A$400 million of property is currently for sale or under contract, but administrators do not expect proceeds from those transactions to provide liquidity to Bathla in the near term.
The group has 45 projects under construction across New South Wales, with about 2,500 homes due to be delivered. Teneo said construction could continue on sites backed by lenders who provide funding, but projects linked to lenders who do not participate may no longer be supported.
Keeping construction running is expected to cost between A$1 million and A$1.3 million a week, depending on how many sites remain active.
Bathla’s staff were due to receive a partial payment on Thursday covering wages accrued since the administrators were appointed on August 25. However, 21 employees and subcontractors have been stood down because of the group’s cashflow problems, with their position due to be reviewed next week.
A meeting with employees has been scheduled for Monday morning, when Teneo is expected to provide an update on the funding negotiations and identify which construction sites can continue.
Administrators also told creditors that customer deposits were still being reconciled across trust accounts held by several law firms. Not all deposits were held in trust, they said, because some contracts permitted part of the money to be used to fund development projects.
Teneo has warned that the short-term funding being negotiated would buy Bathla only a matter of weeks while longer-term options are assessed. Without further support, the developer remains at serious risk of liquidation.
