Builder St Hilliers shuts sites, lays off staff as administrators take over construction arm

Work has halted on 21 building projects in Queensland and NSW after construction firm St Hilliers called in administrators over the weekend, a casualty of the flagging building sector where insolvencies last year hit an all-time high.

Administrators WLP Restructuring partners Glenn Livingstone and Alan Walker said they have secured sites and paused work on all of St Hilliers’ active construction sites while they do an urgent assessment of the business’s financial position and operations.

St Hilliers joint venture development at Thornton in Penrith
St Hilliers joint venture development at Thornton in PenrithCredit:

Gates were locked at some sites in Brisbane on Sunday after the voluntary administrators were appointed to seven construction businesses within the St Hilliers group.

The firm’s property development and investment division, St Hilliers Property, remains unaffected by the construction arm’s collapse.

Data from the Australian Securities and Investments Commission shows, from July 1 to mid-January, the highest number of reports for insolvencies were in the construction industry, about 28 per cent.

Matthew Smith, a partner from law firm Clyde & Co, said that insolvencies hit an all-time high last financial year, but the worst may be over with green shoots “on the horizon”.

“Despite high interest rates and inflationary pressures, green shoots of recovery for the Australian construction sector will continue to push through in 2024,” Smith said.

“Insolvencies in the sector – which hit an all-time high in the 2022-2023 fiscal year – will slow down in 2024, although some subcontractors that are disproportionately affected by inflation and high interest rates may go under in the next 12 months.”

This is the second time in more than a decade that St Hilliers, founded in 1989, has called in administrators. In May 2012, the construction business was hit with a dispute over the funding for the then $350 million expansion of the Ararat prison in regional Victoria.

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At the time, St Hilliers executive director Tim Casey was able to negotiate with the creditors for a deed of company arrangement that allowed the group to keep trading its construction business.

St Hilliers currently has about 164 staff across its various businesses. About 80 staff members will remain in the construction business but at least 22 have been made redundant, the administrators said.

Entities subject to voluntary administration include ST Holdings Pty Ltd, St Hilliers Pty Ltd, St Hilliers Contracting Pty Ltd, STH Bonding Pty Ltd, SHC Civil Pty Ltd, St Hilliers Inventive Pty Ltd, and SH Newstead Pty Ltd.

Livingstone said the administrators are working closely with stakeholders and staff to restart work on projects as soon as possible.

“We are hopeful this can occur in the coming days and that the employment of as many people as possible is preserved,” Livingstone said.

The first meeting of creditors will be held on or before February 14. At this stage, it is unclear how much debt the companies have accrued.

After the outbreak of the global pandemic in mid-2020, many construction projects around the country were shuttered and many firms did not recover.

Smith said that while insolvencies may slow down, disputes will continue as contractors and principals look to recover lost profits through insured risks. “Construction and disputes seem to go hand in hand and this is expected to continue over the next 12 months,” he said.

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Source: Thanks smh.com