New South Wales Rejects Bailout for Debt-Ridden Home Builder Bathla

New South Wales has no plans to bail out Bathla Group, a debt-laden home builder whose possible liquidation has left thousands of homes under construction in limbo.

Planning Minister Paul Scully said the state could not rescue the company. “We’re not willing to write an open-ended cheque at this stage,” he told the Australian Financial Review Property Summit in Sydney. He said the government did not yet know the full extent of its exposure, partly because some of Bathla’s financing was opaque.

Federal Housing Minister Clare O’Neil said Canberra was watching the situation closely but that a federal bailout was also “not something that’s being considered at the moment.” She described Bathla as a significant Sydney developer with a complex and fragmented business structure.

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We’re not willing to write an open-ended cheque at this stage.

Administrators took control of Bathla last month to manage more than A$3 billion in debt owed to dozens of private lenders. The company, founded in 1997, says it has 22,000 apartments and 3,500 homes under development. Administrators stood down more than 200 employees on Sept. 7 while securing two weeks of lender funding to keep some projects moving.

Bathla has not secured longer-term financing. If it is liquidated, the failure could become one of Australia’s largest corporate collapses and complicate government construction targets aimed at addressing a nationwide shortage of homes. The case has also highlighted risks in Australia’s A$200 billion private credit sector.

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not something that’s being considered at the moment