Construction company Kell & Rigby stops work as financial talks collapse

Construction company Kell & Rigby stops work as financial talks collapse
Madeleine HeffernanFebruary 9, 2012

The 102-year-old construction company Kell & Rigby has stopped work at its sites across the eastern seaboard and is reportedly scrambling for a solution to stave off collapse, after losses from apartment projects weighed on the family-run business.

The board's decision to stop work across New South Wales, Canberra and Queensland follows the collapse of talks with a potential partner about a company restructure and refinance.

Construction, Forestry, Mining and Energy Union NSW state secretary Brian Parker is quoted saying that a Chinese investors and property company FKP were the parties that walked away.

James Kell, the managing director whose great-grandfather founded the business, says that two apartment projects – one ahead of the Sydney Olympics, and another in Sydney's Rushcutters Bay – had damaged the company. "The traditional builder contract model for apartments does not work," the Australian Financial Review quoted him saying.

Kell also told Macquarie Radio yesterday that the company is "still talking about a way out of this, about a solution".

But the news puts hundreds of jobs at risk, with the CFMEU's Brian Parker tipping contractors and more than 50 businesses will also be hit by a collapse.

Brian Seidler, of the Master Builders Association in NSW, says it's a "sad day for the building community in NSW".

"These companies played a substantial role in what the city [Sydney] looks like, and there's not many left."

He says that the building industry in the state is not good at the moment, but companies need to take steps to ensure they were not taking work that costs them money.

"The environment is it's a client's market."

According to the Australian Financial Review, the company had annual turnover of $150 million, and says the CFMEU and its lender, Commonwealth Bank of Australia, had been fair to the company.

Although there were predictions the company would enter collapse today, there were no listed changes for the company on the Australian Securities and Investments Commission website this morning.

The company's website was not online this morning. Kell and Parker were contacted for comment.

This article originally appeared on SmartCompany.

 

 


Editor's Picks

Capri prepares to welcome residents to resort-style villa community on Isle of Capri
Buyers take advantage of WA stamp duty concessions as Incontro Subiaco apartments near 50% sold
Gold Coast buyers starting to think longer-term: Five minutes with SRQ Projects Director Nick Clydsdale
A "passion project" not to be repeated: Inside DJ Fisher's Pescado Palm Beach with Jayde Pezet
Why Danby Lane in Nundah is more than just a project for Gardner Vaughan Group: Five minutes with Sam Gardner