*BREAKING NEWS* Grocon declares insolvency and calls in administrator.
Previously reported: SPECULATION is rife that the Daniel Grollo’s property empire Grocon is on the verge of administration, as reports emerged yesterday that the development giant owes more than $5 million to subcontractors at its only Melbourne project while it grapples with troubles at Barangaroo Central in Sydney.
News Ltd and Nine Entertainment said an announcement is expected on Friday morning.
Multiple reports revealed that almost 100 subcontractors at the $111 million Northumberland project in the inner Melbourne suburb of Collingwood are owed money, with outstanding invoices dating back eight months. The site has been locked up and work halted, with subcontactors reportedly having removed tools and equipment.
Grocon is constructing the 12-level commercial building, set to be the new headquarters of Aesop, in a fund-through deal with Impact Investment Group. The Liberman-backed investor is attempting to cancel its contract with Grocon and seek another builder. Completion was nearing but is now expected in April.
Grocon documents filed with ASIC last month said its annual solvency resolutions had not been passed, which it ascribed to the Central Barangaroo issues in Sydney and COVID-19.
Impact has told investors it is seeking advice from lawyers and lenders Maxcap, and that Grocon had flagged it was unable to come up with its costs on the development.
KPMG has reportedly been briefing creditors. Grocon had been given a deadline of midday yesterday to pay contractors money owed for March and April.
Meanwhile, Grocon is in a $270 million legal stoush with the NSW government over its development at Central Barangaroo. It alleges the government quashed its designs on a high-rise tower in order to protect views from the new Crown Casino tower towards the Harbour Bridge and the Opera House, and that it was forced as a result to sell off its interest in the project to Chinese group Aqualand at a heavy discount.
Last year Grocon struck a deal with creditors over two dormant subsidies and avoided liquidation. It came after the company called in administrators for subsidiaries Grocon Constructors (Qld) Pty Ltd and Grocon Constructors (Vic) Pty Ltd over a dispute with Dexus relating to lease payments at the 480 Queen St Brisbane office tower.