A building company that sensationally collapsed earlier this month after it shut down its website and abandoned its construction sites has millions more debt than was first expected.
On March 7, PBS Building, a multimillion-dollar firm which does a mix of commercial and residential projects across Queensland, NSW and the ACT, went into voluntary administration.
When administrators took over the firm, they said the construction company was expected to owe around $25 million to more than 1000 creditors.
But a deeper investigation has revealed a much larger bill to foot.
At the first creditor’s meeting held on Friday, the administrators revealed the debt has snowballed and stands at $40 million at last count.
This figure didn’t include the 180 staff members who were terminated on the spot, but with entitlements that had been paid in full prior to the company’s collapse.
Jonathon Colbran, Richard Stone & Mitchell Herrett from insolvency firm RSM Australia Partners were appointed as joint administrators.
“To date 374 claims have been lodged by creditors – 177 in the ACT, 131 in NSW and 66 in Queensland,” Mr Colbran said. “This number is also expected to rise and fall until the Administrators are able to verify the claims.”
The Friday meeting also revealed the staggering amount of projects underway that have been impacted by the firm’s sudden closure.
PBS Building had 24 projects at various stages of completion when it called in administrators.
Of those, there are five projects in Queensland, eight projects in NSW and 11 in the Australian Capital Territory.
But on top of that, another 56 projects are also at risk.
Although these 56 projects have been completed, they are still in their defect liability period. That means if something were to go wrong, it could be tricky, as there is no designated builder to bear the brunt of the costs.
The fate of PBS Building hangs in the balance. At the next meeting, creditors will decide if the company should be wound up in liquidation or stay in administration under a deed of company arrangement (DOCA) agreement.
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For several days the PBS Building website was showing an error message but just after 2pm on Tuesday the website switched to displaying its status as being in voluntary administration.
The building company had been in operation for 33 years before its collapse.
news.com.au reported on a Queensland family getting nervous about what the builder’s sudden vanishing act would mean for their $640,000 half-built town house.
Since Monday multiple building sites have been shuttered and tradesmen have been spotted collecting their tools, while the company’s website and phone lines are down.
News.com.au previously spoke to Michael*, who preferred not to use his last name, about what the company’s collapse means for the prospects of his three-bedroom, two-bathroom townhouse ever being built.
“I’ve literally been watching the development every day,” Michael, 44, told news.com.au.
The dad-of-two lives across from the development, known as the Curl, in Bokarina Beach along the Sunshine Coast.
Michael and his wife signed a land and build package with developer Stockland in mid-2020 and forked out a $38,000 deposit for building works.
At first, local construction company BA Murphy was contracted to build the townhouses and apartments slated for the Curl development, before the company collapsed into liquidation.
PBS Building was then brought onto the project but now they too have collapsed.
“Hopefully third time lucky for us,” Michael quipped.
It comes as the entire building industry is in crisis because of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, locked-in price contracts and extreme weather events.
So far this year, around a dozen builders have collapsed.
Last year, at least twice as many went bust.
Story Credit: news.com.au