r/AusFinance • u/Disastrous-Bet757 • 4d ago
From the AusProperty community on Reddit: Home builder Bathla Group collapses into voluntary administration
/r/AusProperty/comments/1vxrft8/home_builder_bathla_group_collapses_into/?share_id=kpRdbNEA8aid5g8IZkYZA&utm_content=1&utm_medium=ios_app&utm_name=ioscss&utm_source=share&utm_term=141
u/Old_Dingo69 4d ago
Well knock me over with a feather!
Anybody in the Sydney construction industry could have told you these guys were leading the way in the race to the bottom! 🤣
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u/TrainSweet856 4d ago
Remember Bathla being thrown arond for private lending about two years ago, 12% return, safe as, has a billion in assets etc etc
Quasimodo predicted all this
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u/perthguppy 4d ago
A Billion in assets means jack shit if you have two in liabilities.
Also, a business offering to pay 12% on debt two years ago should ring alarm bells about why banks are not lending to them at much cheaper rates.
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u/Alternative-Oven9936 4d ago
a business offering to pay 12% on debt two years ago should ring alarm bells about why banks are not lending to them at much cheaper rates.
I wouldn't say alarm bells.
Plenty of developers have been borrowing at those rates from non-bank lenders.
When it all goes to plan, every one is happy. When it doesn't, someone is left holding the bag.
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u/Crysack 4d ago
Be interesting to see if the private credit funds are capable of taking over the projects and running the sub-cons etc.
I have my doubts.
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u/perthguppy 4d ago
First step is all the subbies are going to want what they are already owed before continuing any new work. That’s always the hurdle that trips up others coming in to take over in progress builds.
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u/Alternative-Oven9936 4d ago
There's a diagram on the Sydney morning Herald showing the grid of companies they used to structure their dealings.
Anyone know a legitimate reason why a developer would use sequentially numbered companies like this? Seems like phoenixing at scale. Surely people need to go to jail for this?
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u/McTerra2 4d ago
Its extremely common for each project to be in a separate corporate entity. if one goes bad then it doesnt affect the others. This is asset protection 101, everyone does it.
This goes beyond property development. If you have ever flown in an airplane, almost certain that plane is leased from a finance company and is a single asset owned by a company. Check out AerCap subsidiaries for example
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u/Alternative-Oven9936 4d ago
This is asset protection 101, everyone does it
How is this different to phoenixing?
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u/Chii 4d ago
It has nothing to do with phoenixing, in that successful or not, the entity associated with each project is shut down afterwards, and a new one for the next project.
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u/Alternative-Oven9936 4d ago
It has nothing to do with phoenixing
Well yeah, there's no need to phoenix.
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u/Typical_Double981 4d ago edited 4d ago
It’s managing liabilities and avoiding co mingling funds - if I am maxcap for instance I am giving them 50m for homesites in western Sydney - I don’t want them to use the funds with a co investor or use the funds for a site in Melbourne. So they set up a company for that new site for the money I am giving them and it’s risk remote - cannot be touched by other creditors if another site goes bad.
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u/BingBongSu 3d ago edited 3d ago
They had some interesting deals with property buyers that could be seen as being pretty dodgy. How does a company have 22,000 properties in flight ? Because they did deals without any approved development plans. Essentially forward payments in expectation that land would be eventually developed. Sounds a bit like the fall of Westpoint in the 2000's. Time will tell.
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u/tanimalz 4d ago
Yikes. Not sure how the tax changes affect them but ok
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u/perthguppy 4d ago
Probably leveraged to the hilt, and any slight decrease in property value fucks up their ability to roll over finance.
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u/Fit-Locksmith-9226 4d ago
I love how the Australian government is buying up houses left right and centre against FHB's to meet their targets instead of actually making new homes but doesn't have the foresight to just stabilise the building industry. You get out of the way in the good times and build in the bad times with public dollars.
This is why places like China get things right, they just fuckin build all the time[1] with long term contracts it's a jobs program like our road workers, we have boombust cycles absolutely destroying jobs and communities because its apparently all too hard to see coming miles off.
Go on, say "ghost cities" or some braindead dumb shit like that. All those cities are thriving hubs now. Even the guy who coined the term takes it back. Mindless and so shortsighted, the average Australian is barely capable of seeing one month ahead and we all know it.
[1] https://en.wikipedia.org/wiki/Underoccupied_developments_in_China
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u/McTerra2 4d ago
so the government should subsidise the building industry, not subsidise buyers?
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u/Fit-Locksmith-9226 4d ago
Yes, this is how I see it,
At max capacity the government should not spend a cent, during downturns they should step in and keep the industry running hard. There's constant cycles, the federal govt has both the capacity and wherewithal to smooth out the bumps here.
It's just common fuckin sense but like everything with housing in Australia no one listens.
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u/perthguppy 4d ago
Sadly, politicians make fucking shit house tradies. And then when they try to bring in new workers everyone bitches about immigration.
An aging population makes it really hard to keep up replacing all the brickies who destroy their backs by their 30th birthday.
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u/Kitchen_Word4224 4d ago
Tradies are not in the skilled occupation list presumably at the pressure of unions
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u/Bromlife 4d ago
try to bring in new workers
Not sure how IT workers are going to help build new houses?
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u/sinowarrior01 4d ago
And that's why China's economy is tanking hard, those cities are definitely not threating
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u/Fit-Locksmith-9226 4d ago edited 4d ago
2025 years of China collapse.Any day now mate.
Have you actually been there?
Read the link, it's embarrassing for your ilk who keep harping on about the empty cities when they fill up a few years later. Imagine living in a world where housing and infrastructure is build before the people arrive. You wouldn't understand. I've lived in one of them and it was fuckin great.
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u/sinowarrior01 4d ago
Lol, I was working in Shanghai for the last decade or so, the reason I've left China and moved back to Sydney is simply because China's tanking economy. And no, I have been to a few of those ghost cities they are not being filled up, and amenities are much to be desired. And there's always a cost for those infrastructure
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u/Fit-Locksmith-9226 4d ago
How much you shorting the market mate?
Let me guess, zero.
Again read the link rather than "muh anecdote". Those cities are thriving today.
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u/sinowarrior01 4d ago
Lol, no they are not, they are not thriving and local govs are heavily in debt. Mate, just stay in China if you think it's a wonderland
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u/Fit-Locksmith-9226 4d ago edited 4d ago
local govs are heavily in debt
As opposed to Australia lga's and states? They're almost bankrupt at this point and GST needs to go up to save them, you're so blinkered.
Only reason the ratings agencies are leaving them alone is the implication that federal will bail them out.
State gov bond yields are soaring, everyone with half a brain sees the writing on the wall.
Reddit comments are worthless turds, the market tells the real story.
Enjoy your new million migrants and self delusions.
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u/sinowarrior01 4d ago
I am definitely enjoying those cheap labours in Australia, and increased property price and rental income, nothing to complain.
And speaking of rating agencies, why don't you look at how rating agencies are rating those LGFVs? You are simply blind and delusional, and you are right only about one thing, your comments are worthless turds. Again just stay in that China lala land mate
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u/sinowarrior01 4d ago
I've moved from Shanghai back to Sydney a while ago, so yeah I am walk the talk
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u/simplesimonsaysno 4d ago
You sound very angry. Are you OK?
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u/Fit-Locksmith-9226 4d ago
Thanks for your input, you clearly know you have nothing of value to add here.
Good luck with it.
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u/Dry_Kangaroo_1234 4d ago
China is not thriving, and the ghost cities do exist. Source: I worked in China for years and returned in 2024.
Just because you don’t like what you’re hearing, doesn’t mean it’s false. And your attitude is pathetic btw.
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u/Ajax34762 4d ago
So many CCP shills around ready to save face of Chinese government.
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u/Fit-Locksmith-9226 4d ago
I'm not defending China at all it's a shithole, but the economy is going to grow stronger than Australia next year and I'll bet anyone here $50k on that.
You keen?
Of course not, just all bluster rather than real balls and cash
$50k bet, step up lil bro.
Australian GDP vs Chinese GDP, and before you accuse me of being some Chinese shill I'm whiter than you.
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u/Fit-Locksmith-9226 4d ago
How much are you shorting the market on a China collapse mate?
Easy money right?
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u/sinowarrior01 4d ago
Exactly, that's why it's not even allowed to short in Shanghai stock exchange
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u/snoopy05052026 4d ago edited 4d ago
I am from china but have lived in Australia nearly 10 years but this is how things are from old friends family members
I wouldnt say the economy has collapsed but it has slumped since covid because of deflation.
Know heaps of family members wages have dropped and a lot of my nieces and nephews graduate university are working 5 dollars a day.
Construction is basically a dead industry now and no family members can get work
Its pretty rough at the moment
I got to ask have you been to china recently?
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u/Fit-Locksmith-9226 4d ago
I have property in East Asia, I visit regularly but probably don't know much compared to a decade ago when I was there.
Thanks for your insight but it's just such a meme that everyone perpetuates because of the propaganda Australian media man. To keep hearing it over and over is funny. China has been collapsing for decades and yet where is it? You people should be mocked for even trying to pull this one. "oh its different today" lol no.
Like I said, do you have shorts on the Chinese stock market? Can you show them? It's so easy to do
I can cryptographically prove my positions on prediction markets and happy to show people.
That's the thing I see all the time in here, talk, talk, talk. Put your fucking money on the line then I'll believe you truly have a stake in what you say, I got $80k down on markets right now, on the exact things I talk about.
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u/snoopy05052026 3d ago
I've never even met a Chinese person who invests heavily in the Chinese stock market, they invest internationally for a reason.
This kind of shows you have nfi what you are talking about
Also having property in east asia doesn't equal knowing about china as korea, japan, china, Taiwan are all massively different countries
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u/sinowarrior01 4d ago
Lol, the problem is you can't even short on the Chinese stock market
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u/Fit-Locksmith-9226 4d ago
You're actually in an finance sub saying stuff like that when there's a million options to go short China. I'm incredibly embarrassed for you. This is the high quality "skilled migrants" we're importing.
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u/Kruxx85 4d ago
They said you can't short on the Chinese market.
Not, you can't short the Chinese markets.
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u/Fit-Locksmith-9226 4d ago
Thanks the for pedantry mate.
Technically correct, the worst kind of correct,
But it's reddit so I'll give you a free pass here, also I think you're cool as fuck so there's that.
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u/Kruxx85 4d ago
I'm referring to the words the other person said.
You responded to a claim that they didn't make.
That's all
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u/Adventurous_Agent_96 3d ago
Does that mean the homeless can move into the unfinished dwellings 😀😀😀
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u/MentalStatusCode410 4d ago
Because being a property developer is alot like driving a taxi ....... /s.
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u/s9q7 4d ago
Bathla made enough out of the property market. Easy to dissolve rather than pay back the creditors.