Clough administrators keen to start sale

Clough's administrators say they have fielded “multiple enquiries” from interested suitors after securing short-term funding to pay workers on projects caught up in the Perth engineer's collapse.

Deloitte’s national restructuring leader, Melbourne-based Sal Algeri and three financial advisory partners - Sydney-based Jason Tracy, Melbourne-based Glen Kanevsky and Brisbane-based David Orr – were brought in to manage the102-year engineering firm after it went into voluntary administration earlier this week.

The four days since have entailed ‘intensive discussions’ with counterparties to pin down how Clough’s collapse might impact their projects and to determine how much cash will be needed to keep them going, administrators advised.

Yesterday, Mitsui & Co and Beach Energy stepped in to ensure all workers and contractors for the Waitsia Gas Project Stage 2 – which Clough had been contracted to deliver – would continue to be paid what they are owed.

That was followed by an update from Webuild, which this morning said had provided ‘immediate funding’ for Clough employees working on the Snow 2.0 project in New South Wales.

“Webuild is committed to work with all stakeholders to ensure that this nationally significant Australian project will be delivered successfully,” it said.

Deloitte said that it had reached agreements with ‘key parties’ to ensure that employees, joint venture sub-contractors and suppliers are paid, but it is unclear whether that extends to all Clough projects.

According Deloitte, the engineer was working on eight projects across Australia prior to entering administration. 

Two of them were in Western Australia, the $191 million project to extend Stephenson Avenue in Osborne Park and the $750 million Waitsia Gas Project Stage 2.

Business News has contacted Deloitte for comment.

Also impacted is Perth-based business Perdaman, which is yet to confirm a replacement preferred contractor for Clough in order to deliver its $6.4 billion urea project in the Pilbara.

Progress on that project is likely to be delayed as a result.

Voluntary Administrator and Deloitte Turnaround & Restructuring national leader Sal Algeri said Clough was a complex and expensive business to run but with agreements in place, could now move to finding a new owner for the company.

“From day one, our focus has been to understand these costs and find ways to ensure that work can continue on these important projects, some with state and national significance,” he said.

“We can now also focus on recapitalisation and sale of business opportunities, a key components of our strategy.

“We’ve already fielded multiple enquiries from interested parties, and with this immediate funding issue resolved, we can now pursue discussions with these groups, look to find a new owner, and protect jobs, and continuity provide and certainty for stakeholders.”

Webuild was set to buy Clough for $500,000 and the cancellation of a $350 million loan.

Clough has approximately 1250 Australia-based employees, and approximately 1250 overseas employees in Papua New Guinea, the UK and the USA.