South African construction giant WBHO leaves Australia and blames ‘radical’ COVID response

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Construction workers work under cranes on a construction project in Cape Town, file. REUTERS/Mike Hutchings

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SYDNEY, Feb 24 (Reuters) – South Africa’s biggest construction company Wilson Bayly Holmes – Ovcon Ltd (WBHO) (WBOJ.J) has said it is pulling out of Australia, saying the response The country’s “hardline” to COVID-19 had impacted its real estate market and created business uncertainty.

The move represents one of Australia’s most visible pandemic-related business losses and undermines government claims that stimulus packages for two years of stop-start lockdowns have saved businesses and jobs.

In a filing on the Johannesburg Stock Exchange, the WBHO said it had withdrawn its financial support for Australia’s Probuild unit and handed it over to external administration because “the project’s ability to deliver…has been adversely affected. by unforeseen and severe restrictions related to COVID-19” and that the risk outweighed the reward.

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The WBHO said it expected to post a loss for July-December due to trading losses, an impairment charge and unrecoverable “tax assets” in Australia. Its shares fell 27% on the news, their biggest drop since 1998.

The builder, in a separate statement, said the government’s “drastic” response to COVID-19 regarding border closures, lockdowns and forced homework was “dramatically impacting real estate markets as well as other businesses.” other industries such as the leisure industry”.

The restrictions have “created high levels of business uncertainty in Australia and have significantly reduced demand and delayed the award of new projects in these key sectors of the construction industry”, he said.

Probuild, which started in 1987, has worked on several high-profile commercial projects, including the new headquarters of biopharmaceutical giant CSL Ltd, after building a police headquarters in the second most populous state, Victoria.

A year ago, the government blocked a 300 million Australian dollar ($217 million) takeover of Probuild by China State Construction Engineering Corp Ltd (601668.SS) on national security grounds. Read more

A spokesman for Treasurer Josh Frydenberg, who blocked the sale, declined to comment.

Probuild administrator Sal Algeri of Deloitte Turnaround & Restructing said in a statement that he would assess the builder’s financial situation and start looking for a new owner.

($1 = 1.3850 Australian dollars)

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Reporting by Byron Kaye; Additional reporting by Renju Jose; Editing by Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.


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