Administrators for a major housing developer have met a crucial funding deadline, but negotiations to keep the group afloat remain ongoing.
Insolvency advisory Teneo has been scrambling to secure $20million in short-term funding for the embattled Bathla Group since it entered voluntary administration in late August.
As administrator, Teneo set a deadline of Thursday to secure the cash injection, which is when payroll for Bathla’s staff fell due.
On Thursday afternoon, Teneo announced it was yet to secure the short-term funding it is seeking from lenders but enough cash had been found to pay wages accrued since August 25.
The partial payment covers the period since Teneo was appointed administrator, but will not meet all wages owed by Bathla, with some staff having not been paid for weeks.
Administrator Stephen Longley said Bathla’s employees had engaged with Teneo constructively, but stressed the payroll target was only the first hurdle.
‘The situation is complex,’ he said in a statement, adding the short-term funding administrators are still attempting to secure would only afford a few weeks of breathing room.
A Bathla insider told the Daily Mail: ‘Truth is they have no bad intentions. They want to survive.’
Bathla Group (above) has received enough funding to cover its costs since it appointed an administrator in late August
Teneo will now set its sights on the first formal creditors’ meeting slated for Friday, where those owed money would engage with administrators, he said.
One of Sydney’s largest residential developers, Bathla announced it had entered voluntary administration in late August, owing a reported $3.3billion.
The news left countless homebuyers and creditors wondering what it meant for their investments, with staff uncertain whether they would lose their jobs.
A $20million one-month injection would allow administrators to pursue longer-term funding and progress the group’s 45 projects under construction.
Should they fail to secure a lifeline from lenders, the home developer is expected to be wound up after the NSW government declined to bail it out.
According to Bathla’s website, the group has 20,000 apartments and 7,000 dwellings in its delivery pipeline, added to the scores of projects under construction, centred mainly in Sydney’s northwest.
The projects comprise a significant share of the NSW government’s target of 75,400 new homes a year for five years until 2029.
Homebuyers who bought off-the-plan have been left in the dark, uncertain when, or if, their properties will be completed, while contractors have been left scrambling to recoup debts.
The cash injection is not enough to meet all wages owed by Bathla, with some staff having not been paid for weeks
Some private lenders have called in receivers to take control of certain sites, while others have taken steps to assure investors they are not overly exposed.
Founded in NSW in 1997, Bathla joins a long list of Australian home developers which have recently entered voluntary administration or liquidation.
Founder Bhart Bhushan described the move as an ‘orderly restructure’ and cited a range of circumstances, including tax changes in the May federal budget and falling buyer confidence.
