Bid to revive contractor G N Construction looms ahead of Friday deadline

Creditors will on Friday decide the fate of form work contractor G N Construction as more details about the causes of the company’s collapse are revealed. The business was working for Multiplex on Elizabeth Quay’s Lot 6 and a redevelopment of Joondalup hospital when it sunk in February. But G N is set to be revived by directors in a proposal pledging to repay creditors up to 8 cents in the dollar. Administrators from Hall Chadwick have given a green light to the deed of company deal in a report to creditors lodged with the corporate regulator on Tuesday. The report also suggests G N copped big hits from contracts at the One Subiaco apartments and the Kardinya Shopping Centre. The apartment job lost $6 million alone, creditors have been told. G N may have been insolvent from last June, Hall Chadwick estimated as it revealed the company’s losses had tallied $4.2m since July 2022. Revenue in the 2023 financial year was less than half the level two years prior. Administrators said they had been told “the decline in revenue was due to a number of contracts not being awarded to the company due to competitive pricing and increasing costs”. Material and labour cost escalations also squeezed margins. New numbers show G N’s debts could total as much as $44.5 million — but only if vendor financier De Lage Landen pulls the trigger on $25m of related party loan guarantees. Administrators unpicking the relationships between G N and related entities had previously found they owed almost $10m to the business. But the new report shows those other entities had fronted up assets and cash to cover G N’s debts, roughly netting out the position. The company’s former directors were not immediately available to comment.