Bathla Group, one of Australia's largest construction companies, has entered voluntary administration with 15,000 homes still under construction. The company, founded in 1997 and based in Sydney, ceased trading amid reports it was carrying more than A$3 billion (£1.573 billion) of debts, according to News.com.au.
Company statement on collapse
In a statement, the company confirmed it entered voluntary administration on Tuesday, August 25. Managing director Bhart Bhushan, the founder and a former taxi driver, said: "Our first thoughts are with our employees and the customers who have put their faith in us to deliver their dream of home ownership."
He added: "It is my sincere hope this process can allow that to happen by working collaboratively with the administrators, our suppliers, contractors and lending partners."
Reasons for administration
Bathla was a major player in New South Wales' housing market and sponsored the Western Sydney Wanderers, a football team in the A-League. The company specialised in building budget-friendly homes, including apartments and houses, in Sydney's western-most suburbs.
However, falling sales in Sydney, one of the most expensive places to buy property, and a rise in construction costs spelled the end for the company. The statement said: "The Group had confronted a perfect storm of circumstances that had contributed to the Group's circumstances."
These included "a significant softening in sales, impacts from the changes made in the Federal Government's May Budget and falling confidence in key markets." The company also noted "significant increases in construction costs which have been absorbed by the Group" and said these changes "have had flow-on effects to lending markets, putting further pressure on the business."
Administrators appointed
Teneo has been appointed as administrators for the Bathla Group and related entities Universal Property and Raj & Jai Construction.
