Australia: Voluntary Administration Process Commences for St Hilliers Construction Pty Ltd
Last Updated: 18 May 2012

St Hilliers Construction Pty Ltd today announced that it has appointed Trent Hancock and Michael Hird of Moore Stephens Sydney Corporate Recovery Group as voluntary administrators.

St Hilliers Construction Pty Ltd is the construction arm of the St Hilliers Group.

The Administration does not involve St Hilliers Property Pty Ltd, the entity responsible for the Group's activities in funds management, property development and asset management. The operations of St Hilliers Property Pty Ltd and funds and individual investments in each fund are not part of the administration process with independent custody arrangements in place. An associated company, St Hilliers Ararat Pty Ltd is part of a consortium contracted to undertake the $350 million expansion of the Ararat Prison in central Victoria. St Hilliers Ararat Pty Ltd has at the same time been placed into liquidation.

The Administration of St Hilliers Construction Pty Ltd is due to exposure under guarantees for debts of St Hilliers Ararat Pty Ltd relating to the Ararat Prison project in Victoria.

Negotiations over several months between the Ararat Prison equity investors and its Bankers in conjunction with the State of Victoria have failed to reach a definitive agreement for additional funding of approximately $150 million. The St Hilliers Group could not allow further debts to be incurred without adequate funding. As a consequence, the Group determined that the only prudent course of action was to cease work on the Ararat project and place St Hilliers Construction Pty Ltd into Voluntary Administration. The Administrators will be seeking to complete viable projects once they assess the position of each of the projects.

St Hilliers Group Executive Chairman Tim Casey said: "It is very regrettable that we have had to initiate this action. We have over a number of months explored and exhausted all possible avenues to recapitalise the construction business and find a solution to the significant cost and time overruns on the Ararat Project. Unfortunately a solution was not possible under the current regime."

"We will now work actively and constructively with the Administrator and all stakeholders to continue all viable projects and to find a way to restructure the construction business going forward. For the rest of the St Hilliers Group it remains business as usual."

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