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One of Australia’s oldest building companies suddenly collapses with 1,250 jobs up in the air as a $350million deal falls over

  • Merger of Perth-based Clough Group construction company falls through
  • Italian company WeBuild were originally set to acquire Clough in a $350m deal 
  • On Monday WeBuild said following discussions they had pulled out of the deal 

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. 

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

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)

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.

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

History of the Clough Group, one of Australia’s oldest building companies 

– Clough was founded in Perth in 1919 as a building company, developing schools and residential and commercial properties in Perth by John Clough

– Clough is one of the country’s oldest engineering firms, famously building Perth’s Narrows Bridge which was completed in 1959 

– In 1970 Clough expanded into the east coast of Australia and Indonesia 

– Harold, Mr Clough’s son, took over the company from his father and listed it on the Australian stock market in 1998

– In 2004 Murray & Roberts took control of the company in a buyout worth $435 million

– The company’s current projects are in the energy, mining and infrastructure sectors

– They include the Snowy Hydro 2.0 project in NSW and the Stephenson Avenue extension for Main Roads WA in Perth

– The company is understood to have come unstuck by heavy financial losses on the Snowy Hydro 2.0 contract

– In November it struck a deal, with company Webuild to take over Clough

– On Monday the company entered voluntary administration after the WeBuild deal fell through

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