Bathla creditors told company owes $3.4 billion

Bathla Group’s first creditors’ meeting has laid bare the scale of the construction company’s financial crisis, with preliminary figures showing about $3.4 billion owed to creditors.

Secured lenders account for most of that amount, with Bathla owing them about $3.08 billion. The group also owes approximately $145 million to the Australian Taxation Office, $42 million in land tax and $130 million to other unsecured creditors.

Administrators said they managed to meet payroll on September 3, but warned there was not enough cash to keep paying wages. About 21 employees and subcontractors have been stood down, and Bathla owes roughly $4 million in employee wages and superannuation. Staff will receive a briefing on Monday about the funding position and which construction sites can continue operating.

The administrator, Teneo, warned that construction could stop across parts of the business unless new funding was secured by Monday morning. Administrators said they were in “positive discussions” with five lenders about financing the central costs needed to keep construction going. They hoped to reach agreements by the end of Friday, while allowing until Monday morning to finalize the arrangements.

Keeping construction operating costs between $1 million and $1.3 million a week, depending on the projects that continue. Most lenders finance individual projects and have not traditionally covered Bathla’s head-office expenses. Those costs were instead funded through equity released from projects. Administrators are now trying to create a model that spreads central costs across continuing projects. Sites backed by lenders that do not provide funding may not receive support.

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positive discussions