The Sydney-based property developer Ralan Group has collapsed, leaving billions of dollars projects in doubt. The developer owed about $500m to creditors, including Big Four bank, Westpac, and non-bank lender Wingate.
Said Jahani, Phil-Campbell Wilson, and Graham Killer of Grant Thornton were appointed administrators to Ralan Group and more than 50 of its subsidiaries.
“At this stage, we can reveal that the (Ralan) directors felt the company was in a stressed financial situation and decided that voluntary administration was the best path forward as the companies were either insolvent or likely to become insolvent,” Jahani told The Australian Financial Review.
Initial indications confirmed that Ralan owed around $500m, Jahani said.
Ralan currently has a development pipeline of 3,000 residential units in the construction or pre-sale stages.
People who purchased completed apartments were unlikely to be affected. However, for those who purchased off-the-plan in Ralan developments, the outlook is unclear, according to Jahani.
“We are still investigating options regarding the other developments in the pipeline which are yet to commence but have been pre-sold," he said.
The fate of a Ralan development in Arncliffe in Sydney’s southern suburbs was also uncertain, according to Jahani.
“We are in discussions with the relevant stakeholders about the best way to proceed on this project (to) preserve value,” he said.
Ralan’s collapse is the latest in a series of builders and developers facing financial struggles as a result of the market slowdown.
