Join our daily newsletter At The Bell to receive exclusive market insights
- Probuild’s South African parent company Wilson Bayly Holmes – Ovcon (WBHO) said it is pulling out of Australia, citing Australia’s “hardline” COVID-19 policy impacting its business
- WBHO stated that it expects to lose money from July to December due to trading losses, an impairment charge, and unrecoverable “tax assets” in Australia
- WBHO Australia (WBHOA) has engaged Deloitte as administrators
- WBHOA employs around 750 employees directly and has thousands more contractors working on its projects
- On national security concerns, the government vetoed a $300 million purchase of Probuild by China State Construction Engineering Corp a year ago
Probuild’s South African parent company Wilson Bayly Holmes – Ovcon said it is pulling out of Australia, citing Australia’s “hardline” COVID-19 policy impacting its business.
WBHO said in a Johannesburg Stock Exchange filing that it had withdrawn financial support for Australian unit Probuild and placed it under external administration because “project delivery capability … has been negatively affected by unforeseen and severe COVID-19 restrictions” and risk outweighed the reward.
WBHO stated that it expects to lose money from July to December due to trading losses, an impairment charge, and unrecoverable “tax assets” in Australia. Its stock dropped 27 per cent as a result of the announcement, the greatest drop since 1998.
“The Australian businesses have not being able to complete projects on time and not been able to recover variation and delay claims, resulting in material losses in the financial period to date and the requirement for further funding and balance sheet support from WBHOC,” the company added.
In a separate statement, the builder stated that the government’s “hardline” COVID-19 reaction of border closures, lockdowns, and enforced work-from-home had “a considerable impact on property markets as well as other industries such as the leisure industry”.
WBHO Australia (WBHOA) has engaged Deloitte as administrators. WBHOA employs around 750 employees directly and has thousands more contractors working on its projects.
On national security concerns, the government vetoed a $300 million purchase of Probuild by China State Construction Engineering Corp a year ago.
