The failed builder Southern Cross Constructions (NSW) owes its subcontractors and suppliers at least $42 million, according to the first preliminary esdtate by its administrators Cor Cordis.
The information was advised to the creditors meeting in Sydney yesterday, a source confirmed to The Australian Financial Review.
The figure eclipses the initial $17 million estimate given by the CFMEU when the company went into voluntary administration two weeks ago. Southern Cross Construction was a commercial builder, with 39 staff members owed $1.5 million and four projects underway in NSW, including a Bunnings Warehouse and Woolworths at Balgowlah in Sydney’s North.
The administrators will examine a transaction earlier this year when Melbourne construction company Icon bought Southern Cross Constructions and launched a new company called Icon Southern Cross, the source said.
The administrators told creditors they would investigate what projects and benefits transferred from Southern Cross Constructions into the Icon Southern Cross entity.
The directors of Southern Cross Constructions, Andrew Box and Lewis Yazbek, are partners in Icon Southern Cross.
Uncertainty surrounds $230 million worth of commercial and residential projects in NSW after Southern Cross Constructions (NSW) was placed administration.
Box and Yazbek did not put forward a proposal to resume control of Southern Cross Constructions, and it looks likely that the company would be placed into liquidation.
Creditors were told that the company’s main assets were a property in Edgecliff that houses its headquarters, which is worth about $9 million and traded at $6.5 million in 2002.
There is also reportedly a building at Neutral Bay worth about $17 million.
A separate business in the Southern Cross group, Southern Cross Constructions (WA) was placed into administration on November 1.
Administrators from Hall Chadwick were called into Southern Cross Constructions (WA) by the builder's two Sydney-based directors, Andrew Box and Lewis Yazbek.
The WA arm is believed to owe millions to building sub-contractors who worked on the company's construction of Bunnings' new warehouse in Armadale.
It is due to open next week.