13/01/2011 - 00:00

Bank moves in on builder Sizer

13/01/2011 - 00:00

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Long-standing commercial and industrial construction company Sizer Builders was placed into the hands of receivers and voluntary administrators last month after trading unprofitably.

Bank moves in on builder Sizer

Long-standing commercial and industrial construction company Sizer Builders was placed into the hands of receivers and voluntary administrators last month after trading unprofitably.

Sizer’s secured creditor, National Australia Bank, appointed Taylor Woodings as receivers and managers and Ferrier Hodgson as administrator of the company, which had been on the Perth building scene for 18 years as a medium-sized construction company.

Taylor Woodings’ managing partner, Michael Ryan, told WA Business News Sizer’s managing director, Warren Sizer, had been working with the bank to keep the company afloat, but the creditor had ultimately decided to appoint receivers in mid-December.

The first meeting between administrators, receivers and creditors was held on December 31, at which Sizer’s book values revealed the company had just over $10 million in fixed and floating assets, although the administrators are yet to determine their value.

Ferrier Hodgson’s preliminary statement of position disclosed that, according to Sizer’s books, there was $3.75 million owing to NAB, $302,000 owing to employees; but the administrator estimated the amount owing to NAB was $2.89 million.

At the time of the meeting, there was a discrepancy between the book value and the administrator’s estimated real value of what Sizer owed its creditors - $3.6 million, according to Sizer, and $6.9 million, according to Ferrier Hodgson.

Mr Ryan said often claims for damages and shortfalls on purchase agreements were built into administrators’ estimates of owings.

Welshpool-based Sizer had three unfinished projects on its books at the time of its administration, including a private contract for major capital works on Mercedes College and federal government Building the Education Revolution projects at Coolbinia primary school and Mount Lawley primary school.

All of those currently stand at 70 to 80 per cent completion, according to Mr Ryan.

“We are going through the process of reviewing the financial position of company, and the projects it has under way in order to make a decision in relation to trading on the projects or otherwise,” Mr Ryan told WA Business News.

These projects add to the long list of work done by Sizer across the state, including the $4.9 million head offices for Trinity College, the $3.9 million Narrogin Hospital and the $14.5 million Brooks Garden Shopping Centre in Albany.

The future viability of the company will be decided by creditors and administrators at the second meeting set to be held before February 3.

The administration of Sizer follows the collapse of fellow construction company 20*20, which went into receivership early last month despite having $11.5 million worth of contracts under the state government’s Regional Officer’s Housing scheme on its books.

Sizer and 20*20 add to the growing list of construction companies that have gone bust in the past three years.

The Australian Securities and Investments Commission released a report into insolvencies late last year, stating that construction companies accounted for 24 per cent of businesses going into administration between 2007 and 2010.

 

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