Bathla Administrators in Talks with Lenders as $3.4B Debt Revealed

At Bathla's first creditors' meeting, administrator Teneo said it was in "positive discussions" with five lenders over funding to keep construction going, with Monday morning the key deadline.

Teneo senior managing director Stephen Longley said in the virtual call that he hoped to have the funding arrangements in place by the end of today, but they were giving themselves until Monday morning.

If the five lenders provide funding, construction on their sites can continue, but administrators say they "probably won't be able to support" construction on sites whose lenders are not participating.

Administrators estimate supporting construction would cost the business about $1 million to $1.3 million a week, depending on which projects continue.

Bathla is one of Sydney's biggest residential property developers, with a large pipeline of housing projects and land holdings across the region.

The group was placed into voluntary administration last week after running into severe cashflow problems, leaving administrators to work out which projects can keep operating and how creditors will be repaid.

Much of Bathla's development activity is financed project by project through separate lenders, which has made it difficult to find a single funding solution for the broader business.

Company's debt and property position revealed

Bathla Group owes known creditors about $3.4 billion, based on preliminary figures.

The vast majority ($3.08 billion) is owed to secured lenders.

Bathla also owes about $145 million to the Australian Taxation Office, $42 million in land tax and $130 million to other unsecured creditors.

About $4 million is owed to employees for wages and superannuation.

Administrators also put the preliminary stated value of Bathla's 219 sites at about $4.9 billion.

But Teneo has said the $4.9 billion is not cash available to pay creditors. Much of that value is tied up in land and developments, which can take time to sell, and the valuations are preliminary and still being checked.

Much of Bathla's property is also financed by individual lenders. That means proceeds from a property sale will likely need to go towards that project or its lender, rather than being available to fund the broader Bathla business.

Administrators also said that about $400 million worth of property was currently for sale or under contract, but no cash from that was expected to flow to the group in the near term.

Customer deposits

There were also a number of questions from people attending the meeting about the status of customer deposits.

Administrators said they were still carrying out a full reconciliation, with deposits spread across trust accounts held by multiple law firms.

They confirmed not all customer deposits were sitting in trust accounts, because some sale contracts allowed part of the deposit to be used by the business to fund projects.

However, administrators said some contracts had still settled this week even where the deposits were not held in trust.