Major Western Sydney real estate business Bathla falls into administration owing lenders more than $3 billion

A real estate company with more than $3 billion debt has fallen into administration as lenders looked to sell their loans.

Western Sydney company Bathla on Tuesday appointed Teneo as its administrator.

The move freezes operations at Bathla, which has almost 15,000 homes and apartments under construction across Western Sydney.

Bathla’s managing director Bhart Bhushan said the company faced a “perfect storm” contributing to the decision, including Labor’s recent tax changes.

“These included: a significant softening in sales, impacts from the changes made in the federal government’s May budget and falling confidence in key markets,” Mr Bhushan said in a statement.

He stressed that rising construction costs had coincided with these pressures and had “flow-on effects” to lending markets, “putting further pressure on the business”.

Bathla has hundreds of entities under its umbrella including Universal Property Group and Raj and Jai Constructions.

The company’s private credit lenders were looking to sell their loans backing Bathla at a discount, per The Australian.

This would have helped the lenders avoid losing large sums on the loans if Bathla were to collapse.

Documents show Bathla has secured almost $3.6 billion in loans from lenders and had drawn down about $3.1 billion as of several months ago.

Bathla’s CEO Robert Loader said the administration was in the “best interest of all stakeholders”.

“The business has been through a period of declining sales and falling property prices, while construction costs have increased,” Mr Loader said in a statement.

“We will work constructively with the administrators to support the continued delivery of much needed housing for Western Sydney.”

Administrator Stephen Longley said discussions were ongoing with lenders to maintain construction and support Bathla’s operations during the administration process.

“Our priority is to stabilise the business so that construction activity and property settlements can continue in the ordinary course,” Mr Longley said.

“Our objective is to ensure project continuity wherever practicable, and work with lenders to minimise disruption for employees, customers and contractors.”

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