Bathla Group on brink of collapse as administrator warns of closure within days

Bathla Group on verge of collapse unless funding secured

Bathla Group, a Sydney-based property developer, is on the verge of collapse, according to its administrator, who has warned that the company will fold by the end of the week unless it secures additional funding.

Stephen Longley, senior managing director at insolvency firm Teneo, which took control of Bathla's operations on 25 August, said the business lacked the cash to continue operating. "We don't have any cash to pay wages. We don't have any cash to pay suppliers," he said, adding that unless the situation was resolved, the company would have no option but to close.

Bathla entered voluntary administration last week after failing to meet debts that exceeded 2 billion, according to reports from ABC Australia. The company, which has more than 200 development projects across Sydney, employs around 350 head office staff, many of whom have not been paid for eight weeks.

Staff and project priorities

Longley told reporters that some employees had taken a "leap of faith" to continue working unpaid until the end of the week, hoping that an emergency financial backer could be found. He flagged potential redundancies if Bathla survives, with Teneo reviewing its staff to determine which roles are "mission critical." A handful of staff were stood down on Friday, and the review may affect foreign workers on temporary visas, according to ABC Australia.

The administrator said priority would be given to 45 Bathla projects already under construction, which could be completed by February or March if funding is secured. These projects are expected to deliver between 2,000 and 2,500 new homes.

Financial challenges and lender response

Teneo requested a $20 million cash injection to keep the business afloat, but the New South Wales government declined to provide financial assistance. In the absence of government support, Teneo borrowed $1 million from its own head office to cover vehicle registrations, petrol, and other operating costs. "But that can't last," Longley said.

Teneo is now seeking backing from other lenders, and Longley said he would provide an update on Bathla's future after a meeting with potential creditors on Friday. He expressed cautious optimism about the response so far: "The lenders' response has been good. It's just something that's come quickly and we need a lot of people to come together to put a solution together. I'm hopeful that in the next couple of days we'll get there."

Impact on customers

Thousands of Bathla customers have been affected, many of whom have partially built homes. Teneo has said it is not in a position to refund deposits that homebuyers had paid to Bathla. According to Bathla's website, the company has 20,000 apartments and 7,000 dwellings in its pipeline.

Bathla, in a notice announcing its decision to go into administration, said Teneo's immediate priority was to stabilise its operations and work with lenders to support employees and the continued delivery of projects.