Larry SchlesingerMay 15, 2012
The Australian building and construction industry has been plunged into deeper crisis with the construction arm of St Hilliers being placed into voluntary administration due to funding issues relating to the Ararat prison project.
An associated company, St Hilliers Ararat Pty Ltd, part of a consortium contracted to undertake the $350 million expansion of the Ararat Prison in central Victoria, has been placed in liquidation.
A statement on the St Hillers website says that Michael Hird of Moore Stephens Sydney Corporate Recovery Group has been appointed as voluntary administrator.
The construction arm has been placed in administration “due to exposure under guarantees for debts of St Hilliers Ararat Pty Ltd relating to the Ararat Prison project in Victoria”.
“Negotiations over several months between the Ararat Prison equity investors and its bankers in conjunction with the state of Victoria have failed to reach a definitive agreement for additional funding of approximately $150 million.
“The St Hilliers Group could not allow further debts to be incurred without adequate funding. As a consequence, the group determined that the only prudent course of action was to cease work on the Ararat project…