Clough Group enters voluntary administration as WeBuild $350 million takeover deal collapses

One of Australia’s oldest building companies, the Clough Group, has entered voluntary administration leaving 1,250 employees in the lurch. 

On Monday, the Perth-based business’s South African parent company Murray & Roberts informed investors that a $350million ‘white knight’ takeover deal had fallen through.

The 102-year-old building and engineering company, which is building the Australian Government-backed Snowy Hydro 2.0 energy project, was set to be acquired by Italian construction group WeBuild.

A conditional deal was struck on November 8 but less than a month later it had fallen apart, with the European business announcing there is ‘no reasonable prospect’ of it going ahead. 

On Monday, Perth-based Clough Group informed administrators that a $350 million takeover deal for their company had fallen through 

See also  World's deepest shipwreck FOUND: WWII US Navy ship discovered more than 22,600ft below the surface

The 102-year-old building and engineering company was set to be acquired by Italian construction group WeBuild but the deal ultimately collapsed

‘Webuild now announces that the parties have jointly determined and agreed that there is no reasonable prospect of that acquisition proceeding through to a successful completion,’ WeBuild said in a statement.

‘The parties have therefore unconditionally agreed to terminate the SPA with immediate effect.’ 

In a statement to the Johannesburg Stock Exchange, parent company Murray & Roberts said it had no other option except to install administrators.

‘For an Australian company, voluntary administration is a flexible, short-term process which has the primary objectives of maximising the chances of the company, or so much of its business as possible, continuing in existence, and otherwise optimising the return for the company’s creditors and members,’ it said.

Clough posted a $375.3 million loss and a $304 million working capital deficit in the last financial year (pictured is a Clough worker)

They most notably were contracted as part of the federal government’s Snowy Hydro 2.0 expansion

 Clough’s 1250 Australia-based employees as well as 1250 employees from Papua New Guinea, the UK and the US are now facing uncertainty.

The company is also under contract to complete several other projects in Western Australia, NSW and Papua New Guinea, leaving multiple projects in the lurch.

Four individuals from the Deloitte Australia corporate rescue team have been appointed as administrators.

The Perth-based company borrowed $167 million from WeBuild, reported The Australian.

They also were set to receive a $30 million loan but as of Monday, that agreement has also been scrapped.

The company posted a $375.3 million loss and a $304 million working capital deficit in the last financial year.