- Ernst & Young has placed Jaxon Construction in liquidation, making it the latest Western Australian builder to collapse
- It comes after a three-week search for funds by the firm as workers at the University of Western Australia’s Forest Hall building site walked out
- Owners Harry and Demetra Xydas said in a statement that the decision was difficult, but the right choice to avoid further fallout
- It follows Pindan which in May went into external administration owing 1400 creditors between $70 and $80 million, according to EY
Jaxon Construction is the latest Western Australian builder to collapse with the company being put into liquidation by Ernst & Young today.
It follows a three-week effort from the company to find cash as workers walked off its Forest Hall construction site at the University of Western Australia.
Sam Freeman, Vincent Smith and Justin Walsh of EY were appointed joint and several liquidators of six entities within the Jaxon Group companies on August 27, 2021.
Under the appointment of EY, the group has ceased all operations, including its four commercial projects.
“We are urgently assessing the financial position of the group and will shortly commence our investigations into the affairs of the group,” an EY spokeswoman said.
“We acknowledge our appointment as liquidators may place many employees, individuals, clients, suppliers and subcontractors of Jaxon Group companies in difficult positions and will endeavour to provide further updates as soon as practically possible.”
Owners Harry and Demetra Xydas said in a statement that the decision was difficult, but the right choice to avoid further fallout.
They said that a tough trading environment and tightening margins had been impacting the company for years and that COVID-19 saw them lose about 60 per cent of its forecasted revenue last year as planned works were cancelled or postponed.
“Despite best efforts by Jaxon’s management and staff to reduce the company’s cost structure without jeopardising existing clients and our order book, we were unable to sufficiently address the cash flow problem,” they said.
“Following constructive conversations with JAXON’s financiers and key clients, we have come to the regretful conclusion that winding up and liquidating the JAXON business is the only acceptable path forward.
“It would be inappropriate for us to comment further on Jaxon’s financial status given today’s appointment of EY as liquidators.”
The companies put into liquidation are Jaxon Construction, Jaxon Koombana, Jaxon Management, Jaxon Group Holdings, Skyline Realty and Doric Jaxon Corporate.
The Jaxon collapse follows Pindan, which in May went into external administration, possibly leaving hundreds of subcontractors out of pocket by thousands of dollars and owing 1400 creditors between $70 and $80 million, according to EY.
The collapse prompted the State Government to reintroduce laws to partly cover the payments of building subcontractors.
Programmed Facility Management has since purchased one of Pindan’s divisions, the former public housing maintenance provider Pindan Asset Management, securing around 90 jobs.