UPDATED 8:02PM FEBRUARY 3, 2023, FIRST PUBLISHED AT 7:51PM FEBRUARY 3, 2023
Italy’s Webuild will take on construction of Perdaman Chemicals Pilbara urea plant as the Italian construction deal finally signed a deal to take control of collapsed WA contractor Clough.
Webuild will emerge with almost all of the venerable engineering company’s assets, people and projects for $35.9m after protracted negotiations finally came to a close on Friday.
The deal offers saving line for Perdaman’s $US4.5bn Ceres urea plant in the Pilbara, which could otherwise have been forced back to the drawing board to find another partner for Saipam in the project team, again pushing back construction of the long-stalled project.
Webuild will not take from Clough’s pipeline is the WA engineering company’s role in Transgrid’s 700km EnergyConnect transmission line project it held with Elecnor.
Webuild will take on Clough’s role in their joint venture projects at Snowy Hydro 2.0 and a major section of the federal government’s inland rail project.
It will also take on responsibility for finalising Beach Energy and Mitsui’s Waitsia gas project in WA, EnergyAustralia’s Tallawarra gas plant in NSW and the Royal Australian Navy’s Lombrun base in Papua New Guinea.
Webuild said on Friday it would also take on Clough’s 1100 Australian staff, easing concerns among long-term employees that about $30m worth of entitlements could be lost after the collapse of the 100-year old engineering firm.
Clough collapsed in December after Webuild pulled out of an earlier deal to take control of the troubled contractor, with Deloitte appointed as voluntary administrators.
Deloitte administrator Sal Algeri said on Friday the deal was an “outstanding” outcome for the company’s staff, as well as its clients and other partners across the country.
“In this case, every employee who wants to retain their job will be able to do so, and their entitlements are protected, subcontractors have been paid via the interim funding arrangements we have been able to negotiate, and lost time on projects has been minimised,” he said.
Webuild will also take on a number of other parts of Clough’s pipeline of work, including a debottlenecking project for BHP’s Nickel West operations, a water treatment plant in the south of Perth for the WA government, and a significant port project for the Northern Territory government.
The Italian construction giant will also indemnify or organise replacement sureties worth $174m already issued by Clough for current projects.
Creditors will vote on the deal in mid-February.
If the deal is not approved the company faces potential claims from clients worth up to $2bn, according to Deloitte, with the bulk of that figure likely to come from guarantees issued to Snowy Hydro over construction of the Snowy 2.0 pumped hydro expansion.
“Importantly, subject to creditor approval, the transaction will also ensure that significant contingent liabilities, including large scale redundancy and contractual damages claims against the Clough Group, will not eventuate,” Deloitte said on Friday.
Neither Webuild or Deloitte gave details of the deal to transfer Clough’s assets on Friday, but the protracted negotiations are understood to have revolved around Webuild’s acquisition on loss-making projects held by the WA company.
Mitsui and Beach are understood to be prepared for the contract to switch to a reimbursable basis at Waitsia, effectively removing some of the financial risk for Webuild and boosting the chances of the development being completed on time and budget.
Mitsui E&P Australia (MEPAU) chief executive Ken Yamamura said the closing of a deal was good news for the project and for its workers and contractors.
“We would like to thank all parties for their patience and efforts since Clough entered administration, and in particular, the Clough employees who have kept working on the project through the recent uncertainty,” he said.
Webuild proposed a $17.6m deal for Clough in December, which included only the Snowy and Inland Rail projects, as well as the Clough brand and the administrative and engineering staff working directly for the company.
Deloitte and Webuild originally gave themselves until December 21 to finalise a deal on projects including Waitsia, its contract with Energy Australia on the Tallawarra gas plant and the Australian Navy’s Lombrum base in PNG.
That deadline was then extended to January 25 and then again to January 30, before finally closing on Friday.
Transgrid’s EnergyConnect scheme is the notable exclusion from Clough’s project pipeline, with market speculation suggesting an external party such as Spain’s Acciona may have interest in teaming up with Clough’s joint venture partner Elecnor on the $2.3bn facility.
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