St Hilliers Construction has announced it has entered voluntary administration after the company reported a number of problems associated with the construction of the $350 million expansion of the Ararat Prison in Victoria.

 

The group blamed stalled negotiations over the previous few months with the Ararat Prison equity investors and its bankers in conjunction with the Victorian Government. The negotiations failed to procure an agreement for an additional $150 million in funding.

 

The group’s board found that it could not run the risk of incurring additional debt, and that the entry into voluntary administration was the only prudent course of action.

 

The company has appointed Moore Stephens Sydney corporate Recovery Group as administrators, who will take over the operation of the troubled group.

 

St Hilliers Group Executive Chairman Tim Casey said: “It is very regrettable that we have had to initiate this action. We have over a number of months explored and exhausted all possible avenues to recapitalise the construction business and find a solution to the significant cost and time overruns on the Ararat Project. Unfortunately a solution was not possible under the current regime.”

 

“We will now work actively and constructively with the Administrator and all stakeholders to continue all viable projects and to find a way to restructure the construction business going forward. For the rest of the St Hilliers Group it remains business as usual.”