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One of Australia’s oldest construction companies suddenly collapses with 1,250 jobs up in the air as $350m deal falls
- Perth-based builder Clough Group merger fails
- Italian company WeBuild was originally set to acquire Clough in a $350 million deal.
- On Monday, WeBuild said after discussions that it had backed out of the deal.
One of Australia’s oldest construction companies, the Clough Group, has gone into voluntary administration leaving 1,250 employees in the lurch.
On Monday, the South African parent company of the Perth-based firm, Murray & Roberts, told investors that a $350 million “white knight” takeover deal had fallen through.
The 102-year-old engineering and construction company, which is building the Australian government’s Snowy Hydro 2.0 project, was set to be acquired by Italian construction group WeBuild.
A conditional agreement was reached on November 8, but less than a month later it fell apart, with the European company announcing that there is “no reasonable prospect” of it going ahead.
On Monday, Perth-based Clough Group informed managers that a $350 million takeover deal for their company had fallen through.
The 102-year-old engineering and construction company was to be acquired by Italian construction group WeBuild, but the deal ultimately fell through.
“Webuild now announces that the parties have jointly determined and agreed that there is no reasonable prospect of successful completion of that acquisition,” WeBuild said in a statement.
“Therefore, the parties have unconditionally agreed to terminate the SPA with immediate effect.”
Notably, Clough was hired as part of the federal government’s expansion of the Snowy Hydro 2.0 project.
The Perth-based company borrowed $167 million from WeBuild, reported the aussie.
They were also scheduled to receive a $30 million loan, but as of Monday, that deal has been canceled as well.
The company posted a loss of $375.3 million and a working capital shortfall of $304 million in the last fiscal year.
Clough posted a loss of $375.3 million and a working capital shortfall of $304 million in the last fiscal year
Most notably, they were contracted as part of the federal government’s Snowy Hydro 2.0 expansion.
Clough’s 1,250 employees in Australia, as well as 1,250 employees in Papua New Guinea, the UK and the US now face uncertainty.
The company is also under contract to complete several other projects in Western Australia, New South Wales and Papua New Guinea, leaving several sites in the lurch.
Four people from Deloitte Australia’s corporate rescue team have been appointed as administrators.