WBHO Infrastructure’s parent company had pledged continued financial support until at least October 2022, after the subsidiary made a $35 million loss in the 2021 financial year.
The West Perth civil engineering business was one of 18 entities which entered administration last week when Johannesburg-listed Wilson Bayly Holmes – Ovcon withdrew financial support for its Australian subsidiary WBHO Australia Pty Ltd.
The companies impacted included Melbourne-based builder Probuild, which showed trade debts of nearly $250 million in its annual report for the year to June 2021.
WBHO Infrastructure won work on local projects last year including upgrades to Mitchell Freeway and construction of ponds at the BCI Minerals Mardie salt project.
But financial documents submitted to the Australian Securities and Investments Commission show it was weighed down by the Western Roads Upgrade project in Victoria.
WBHO Infrastructure posted a $35 million loss in the year to June 2021, following a $101 million loss in the previous financial year.
Revenue had been $271 million, down from $669 million, as the company cut back bidding on east coast contracts and sought to focus on completing the Western Roads Upgrade.
The company’s annual report, signed off by BDO director James Mooney, said the pressures had been “managed through continued financial support from parent WBHO Australia Pty Ltd and the ultimate parent Wilson Bayly Holmes-Ovcon”.
That included a $108 million recapitalisation in the 2020 financial year, a $17 million injection in the year to June 2021, and $34 million of loans.
By the end of June 2021, WBHO Infrastructure expected significant cash outflows to continue.
Under the “going concern” section, which covers a business’ ability to meet ongoing financial obligations, the annual report said WBHO Infrastructure may be dependant on ongoing support from its parent to meet its debts as they fall due.
“The company’s ultimate parent, WBHO Construction (Pty) Limited, have provided a letter offering to provide continuous financial support to the company for a period of at least 12 months from the date of signing this report,” the document continued.
That entity is based in South Africa, and is a subsidiary of Wilson Bayly Holmes – Ovcon, according to a recent filing on the Johannesburg Stock Exchange.
The WBHO Infrastructure report was signed off in October 2021, implying the financial support would continue until at least October this year.
“A cash flow forecast prepared by management demonstrates the group expects to continue to be profitable and satisfy its obligations under its existing security facilities,” the report said.
“For these reasons, the directors consider the group, and therefore the company, remains a going concern and these financial statements have been prepared on this basis.”
WBHO Infrastructure had 384 employees at the time of filing, and had about $45 million of trade payable debts.
