Save articles for later
Add articles to your saved list and come back to them any time.
Work on more than 700 Victoria homes has been halted after another construction company went into administration in another blow to the state’s struggling building industry.
Mahercorp announced late Friday it had entered voluntary administration and building works would cease for more than a month while administrators consider restructuring the business.
The announcement came just weeks after Australia’s 12th largest home builder, Porter Davis, left 1700 homes in Victoria and Queensland unfinished when it went into liquidation.
Mahercorp includes housing construction brands Urbanedge Homes and Eight Homes, as well as House and Land World, which helps buyers source land and build in regional Victoria.
In a media release, administrators from Cor Cordis said Mahercorp had determined this week that it would soon become insolvent “due to a significant supply chain issue” and decided to appoint voluntary administrators instead.
“We’ve commenced an urgent review of Mahercorp’s financial position and have held preliminary discussions with senior management regarding a proposal to restructure the business,” Cor Cordis said in the statement.
“We will be providing regular updates to all stakeholders as we work through the voluntary administration process.”
The administration process will be carried out by Jeremy Nipps, Barry Wight and Rachel Burdett from Cor Cordis.
In a letter sent to clients on Friday, Mahercorp chief executive officer Steve Maher blamed “unprecedented challenges” in recent times, but was adamant the company he founded in 2002 had not collapsed.
He said entering voluntary administration was the only option after encountering a problem with the insurer of a major supplier. Construction work is expected to be on hold across 730 properties for five weeks.
“It’s no secret that all builders are facing unprecedented challenges right now. Building costs are skyrocketing – materials and labour costs are at record levels and rising inflation is putting huge pressure on builders,” Maher said in the letter which was circulated online.
“To ease the strain of these cost increases, for some months now we have been renegotiating our trading terms with our suppliers and insurers. Their support to date has helped us manage spiralling costs.”
Premier Daniel Andrews this week announced a $15 million rescue package to compensate 560 families whose deposits should have been protected through insurance following the collapse of Porter Davis.
At least 40 would-be homeowners were affected when Hallbury Homes appointed administrators in January, but there has been no government bailout package for those without the necessary insurance.
With AAP
Our Breaking News Alert will notify you of significant breaking news when it happens. Get it here.
Most Viewed in National
From our partners
Source: Read Full Article
