Victorian new home builder Harmac Group entered voluntary administration on Tuesday, a development which will pause construction projects across the state for weeks.
But as the company makes the “difficult decision” to restructure, it said its intention remains that current builds will still be completed.
Harmac Homes, Harmac Constructions, Harmac Urban Living and Ridge Homes — build businesses under the parent company Harmac Group — are all impacted by the recent struggles rocking the industry.
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The builder, which has customers in Melbourne’s west, Geelong and Bendigo, stressed that it has not collapsed.
But customers can expect to wait out the length of the voluntary administration period before works continue — an estimated five weeks.
“Through the voluntary administration process, Cor Cordis will pause construction works while they urgently assess the business operations,” restructuring advisory firm Cor Cordis said in a statement.
Administrators Shaun Matthews and Barry Wight will “explore all options to restructure or recapitalise the businesses, including through a deed of company arrangement,” it said.
Harmac Group entered voluntary administration on Tuesday, but stressed that current builds would be paused, not cancelled. Credit: Harmac Group/Instagram
Fifty homes will be impacted by the voluntary administration and pause on projects, a Harmac Group spokesperson told 7NEWS.com.au, but added that 15 homes are expected to be completed within the five-week administration period.
“These customers will be able to take possession of their homes,” they said.
“No projects have been cancelled.”
Harmac Group has, however, made cuts to its own workforce, axing 23 employees. A total of 16 employees retained their position, the spokesperson confirmed.
The company said in a letter to its clients, seen by 7NEWS.com.au, that its struggles are not unique.
“It’s no secret that builders are facing many challenges right now, with spiralling materials and labour costs and rising inflation putting unprecedented pressure on the construction sector,” it said.
“Given these economic challenges, we had no choice but to enter voluntary administration.”
Harmac Group confirmed stakeholders will receive regular updates.
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