Another New South Wales construction company, Southern Cross Constructions (NSW), which was working on a development in Wollongong has collapsed, owing creditors an estimated $17 million.
Ozem Kassem from administrators Cor Cordis Chartered Accountants yesterday confirmed that it was appointed on Wednesday – a day after dozens of workers picketed a Woolworth's building site at Balgowlah over unpaid wages.
Mr Kassem said it was "too early to say" what had happened to the company but administrators would focus on completing its remaining construction projects to "significantly improve" the return to 600 creditors.
"We will also need to establish what is owed to each of the contractors whose ongoing support is required to complete those projects and we will also consider the future of the 39 company employees and their employee entitlements," he said.
Developers Woolworths and Bunnings had paid some subcontractors directly at two Balgowlah sites in order to keep work going, Mr Kassem said. Southern Cross was also working on a further three residential developments at Hurstville, Dee Why and Wollongong.
Southern Cross is the latest of several collapses in the NSW construction sector, following the winding up of Reed Construction, St Hilliers Construction, Kell & Rigby and its subsidiary Brisland, and the collapse of builders Westminster and Cosmopolitan.
Mr Kassem said the company's directors blamed the problems facing the industry. "But we'll make our own assessment in due course," he said.
Southern Cross had formed a new entity with Victorian company Icon earlier this year to undertake new projects, which were not affected by the collapse, Mr Kassem said. The other members of the Southern Cross Group would also trade as normal.
Mr Kassem said the preliminary investigation into the company's financial position would report back to creditors in three to four weeks, "together with any proposal regarding the future of the company".
"We're going to do our best to try and get everybody paid as quickly as possible. It is hard times for everybody and these situations are never easy, we've just got to do our best to salvage and get the best result."