Construction giant Grocon has resolved a dispute with property group Dexus after reaching a settlement deal with the listed landlord and other creditors, including the tax office, over debts of more than $39 million owed by two collapsed Grocon subsidiaries.
Under the deed of company arrangement proposed for both entities and filed with the corporate regulator this week, Grocon Group Holdings will pay creditors excluding Dexus a total of $4 million in four instalments between March 2020 and December 2020. The Australian Taxation Office had claimed a $9 million debt against the Grocon entities – Grocon Constructors Vic and Grocon Constructors Qld.
In addition to the $4 million, Grocon Group Holdings will pay Dexus an unspecified amount to resolve its dispute with the listed group.
The Grocon creditors, led by Dexus, voted in favour of a revised deed of company arrangement put forward by Grocon at a creditors meeting on December 13.
The parties have reached a settlement of the disputes between them with respect to the amount claimed by Dexus.Minutes of creditors’ meeting.
“The parties have reached a settlement of the disputes between them with respect to the amount claimed by Dexus without admission of liability,” according to the minutes of the December 13 creditors’ meeting.
“The settlement includes a payment by Grocon Group Holdings to Dexus in consideration of the mutual releases extending to outstanding amounts claimed by Dexus against Grocon.”
The affirmative vote came after the listed property group voted against the first deed of company arrangement put forward by Grocon in November.
A spokeswoman for Dexus declined to comment saying the settlement amount was “commercial in confidence”.
A Grocon spokeswoman also declined to comment on the Dexus settlement and the tax position of the entities. She confirmed Grocon and its related entities contributed $4 million to the deed of company arrangement.
Grocon called in administrators on October 25 following a Federal Court dispute with Dexus over nearly $29 million in debts owed by Grocon’s entities to Dexus for rent and lease payments relating to the 480 Queen Street office tower it purchased from Grocon in Brisbane.
The administration sparked a war of words between Dexus and Grocon with Grocon saying the administration was the result of Dexus escalating its demands for payment during the court process and describing Dexus’s attitude as “unreasonable and disappointing”.
Dexus hit back in an ASX announcement saying Grocon’s media release was “factually incorrect”, adding the debts were three-years-old and that Grocon had issued court proceedings after Dexus issued statutory demands against the Grocon entities. “Dexus is following, and intends to continue to follow, the court’s direction,” it said.
Grocon has said the two entities were inactive and had no workforce employees.
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