7 April 2024

Administrators may have found buyers for failed building company

| Ian Bushnell
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building company shopfront

The Cubitt’s Display Centre in Fyshwick. Eleven projects were affected in the ACT. Photo: Cubitt’s.

Administrators of failed building company Cubitt’s Granny Flats and Home Extensions have offered some hope to creditors, revealing that all or parts of the firm may be sold.

The company, which operated in the ACT and NSW for 30 years, went into voluntary administration in February owing 200 creditors $3.8 million, leaving 120 projects in train or awaiting payment and 80 staff out of work.

Eleven of these projects were in the ACT, 49 were in NSW, and a further 60 were either in pre-construction or had been completed and are awaiting final payments.

READ ALSO ACT Greens pledges 10,000 more public homes in 10 years if elected

RSM Australia partners Richard Stone and Brett Lord advised creditors this week that interested parties were undertaking due diligence on the company, which built age-friendly, self-contained homes and housing extensions.

They said a nationwide search for a potential purchaser had identified 40 interested parties — 12 of whom submitted formal expressions of interest to either purchase some or all of the business or enter a Deed of Company Arrangement (DOCA).

Mr Stone said two of the interested parties were undertaking due diligence to potentially put forward a DOCA — a binding contract with creditors that seeks to maximise the chances of the company resuming operations in some form.

“It’s an encouraging development, but it’s still early days,” he said.

“It’s the view of the administrators that a DOCA is likely to provide a greater return to creditors than a single offer or combination of offers to purchase all or part of the business.

“However, we are keeping all options on the table and are continuing to engage with other interested parties should a formal DOCA proposal not eventuate.”

Mr Stone said the next creditors’ meeting, due on 10 April, would now be postponed for up to 45 days to allow time for formal DOCA proposals to be submitted and assessed.

“I would then reconvene the meeting and present final options and recommendations on the future of the company to creditors for a vote,” he said.

Mr Stone also told creditors that the company’s deteriorating cashflow coupled with declining margins and increasing costs had led to its difficulties, in conjunction with the COVID-19 pandemic and several extreme weather events.

According to initial investigations, the company had $1.67m in assets and $5.6m in liabilities, which included money owed to trades and employees.

READ ALSO Project Coordination now owes $25 million, more projects impacted

However, these numbers were expected to continue changing throughout the administration.

The company has four display centres, in Canberra, Sydney, Newcastle and Wollongong.

It is one of several building companies in the region that have gone under this year in the current economic environment and conditions impacting the building and construction industry.

Others include Rork Projects, Project Coordination and Voyager Projects.

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