Frasers Property Edmondson Park works cancellation triggers Strongbuild voluntary administration
Strongbuild has collapsed into voluntary administration after the developer Frasers Property Australia cancelled a $45 million contract which left the builder unable to pay its bills.
The Strong family-owned company that employed 150 staff in three divisions was a prefabricated construction pioneer.
Administrator BRI Ferrier was appointed this morning to Strongbuild Manufacturing, Strongbuild Commercial and Strongbuild Propriety.
The company is owned by the Strong family from the New South Wales South Coast.
It had a turnover last year of $160 million, but had been suffering from a "lull" in work, BRI Ferrier administrator Brian Silvia advised.
"They had a bit of a downturn in work before June and they were anticipating coming out of a bit of a lull with an order book of $120 million, and a major client pulled a contract two weeks out from the start date, which had a value of $45 million," Mr Silvia told The Australian Financial Review.
"With the loss of the contract it meant the short-term future of the company was too bleak for the directors to be able to carry on."
Silvia said Strongbuild had made a claim against Frasers over the cancelled stage two $45 million contract for its Edmondson Park project in south-west Sydney of 104 townhouses. Frasers recently advised only three 1-bedroom townhomes remained following its recent launch.
A spokeswoman for Frasers told Fairfax Media it was a commercial matter and declined to comment.
Some 1,800 homes were envisaged in the now stalled Frasers Property community.
Strongbuild managing director Adam Strong told The Fifth Estate that Frasers gave no reason for "reneging" on the arrangement, other to cite matters of “convenience.”
Strong said 22 townhouses in stage one had already been successfully delivered by his company.
“We had a debt facility approved that would have been more than enough to get through this squeeze last week.
“And what’s happened is Frasers terminated a contract on Friday last week without allowing us to address any of their concerns," Adam Strong said.
The company had worked on the award winning Putney Hill project, an earlier Frasers Property community.
Putney Hill represented the Singaporean Frasers Property's first delivery of off-the-plan houses in Australia.
Frasers are set to face residential challenges in 2019.
Just 2,300 units are planned for completion and settlement in FY19 by Frasers Property Australia, compared to over 3,000 units settled during FY18.
They had success at Ed.Square, their mixed-use community in south west Sydney, when seeking commercial tenants earlier this year.