Major building companies go into administration
ONE of the region's largest builders has gone into administration, citing coronavirus effects, tight lending conditions and a "financially catastrophic" Brisbane project as causes of the collapse.
FTI Consulting has been appointed administrator of RGD Group Pty Ltd and RGD Constructions Pty Ltd, both directed by Ron Grabbe.
The major Coast builder sent written notices to creditors on Sunday advising of the situation.
"Unfortunately, due to the onerous lending conditions over the past three years and significant consequences caused by the coronavirus, RGD Group Pty Ltd has been forced to be put into voluntary administration," a letter signed by Mr Grabbe read.
A similar letter was sent out advising RGD Constructions Pty Ltd had been forced into voluntary administration.
"A financially catastrophic Brisbane project also heavily impacted the businesses' financial position," the letter continued.
"I intend to work closely with FTI Consulting to get the best possible outcome for the creditors that are affected by this situation."
Mr Grabbe also wrote it was a "very difficult time for myself and my family and for the local businesses whose support we have enjoyed for many years who may suffer loss".
"I am deeply sorry for any financial stress to others suffered as a result of the company's current financial difficulties," Mr Grabbe's letter continued.
The Daily understood several creditors were owed hundreds of thousands of dollars, but it was unclear the full extent of the debts owed.
In July last year RGD Group had its licence suspended by the Queensland Building and Construction Commission, which Mr Grabbe explained had been down to an administrative error.
At that time he advised the company had three major projects under way and two in development stages worth a total value of about $154 million which had more than 200 people working on them.
That suspension had not affected the related company RGD Constructions.
RGD Group had been behind the $40 million The Rhythm on Beach in Maroochydore, as well as The Edge corporate office headquarters, Lake Kawana Private Hospital and 240 recently completed apartments at the new Oceanside Precinct.
An FTI Consulting spokesman said John Park was appointed late on Friday, May 8, and confirmed the company was currently in a trading halt, with no work or operations at present.
Mr Park and his team of administrators were in the process of assessing the financial circumstances of the two companies, with an update to follow once that work had been undertaken.
The spokesman said it was too early to give an indication of the scale of debts involved, or how many creditors were owed money.