Andrew Roberts paves his exit from construction with $20m deal

Despite a stabilisation of building material costs and finance over the past 18 months after extreme surges in the post-COVID-19 pandemic environment, building contractors in Australia operating on razor-thin margins have been collapsing in greater numbers than at any time in the past decade as unprofitable projects have overtaken their ability to bring in revenue.

The deal, which allows Roberts to step away from the ambitious tier 1 contracting business he set up eight years ago, severs a connection with construction that started when his father John Roberts founded contracting giant Multiplex.

The forgiveness of “significant” related-party loans would boost the outcome for creditors, FTI Consulting administrators Vaughan Strawbridge and Joseph Hansell said in a statement published on Monday.

The administrators said debts across the eight entities, two of which were dormant, included $3.9 million to NAB, $3.7 million to 87 staff, $2.6 million in staff payment-related loans and unsecured trade, bonding and contractor creditor loans of $97.1 million.

“We have identified several drivers as possible causes for the companies’ failure,” the administrators said in a separate report sent to creditors last week ahead of Monday’s meeting.

These included poor discipline around recording of project information, disputes with contractors, and non-payment of progress claims and “numerous” out of money contracts “where the agreed build cost to complete could never be bridged from available funds”.

A further cause was the inability of the companies to access funding in connection with $27 million worth of shares awarded to an Andrew Roberts-controlled entity but not paid for, they also said.

Final details of payouts to creditors of the businesses including Roberts Co Australia and Roberts Co Management Services, Roberts Co (WA), Roberts Co (Interiors) and Monaco Hickey (VIC) were not available and may not be known for some time.

But the $17.44 million from Andrew Roberts would be added to up to $20 million the administrators said could come from asset sales and recovery of assets in WA, as well as any funds that could be paid out from the Victorian administration after completion of that process.

This was likely to mean employees would likely get paid their entitlements in full, as would certain creditors and some small creditors, a source with knowledge of the process told The Australian Financial Review late on Monday.

Subcontractors would get paid up to 57¢, bond providers between 36¢ and 45¢ and unsecured creditors about 33¢, the source said.

Creditors of the companies – which also included ultimate group holding company RCAH Pty Ltd – voted up the deed of company arrangement on Monday in parallel to a meeting of creditors of Roberts Co (VIC) entering into a separate deed relating to that company.

“We have worked with the voluntary administrators of Roberts Co (VIC) Pty Limited, McGrathNicol, going through the issues in the group,” FTI Consulting’s Strawbridge said in a statement.

“There is still a lot of work for McGrathNicol to undertake in resolving subcontractor claim and mitigating losses under contracts in Victoria, but this is a significant contribution to the payment of creditors that has been secured.”