Yet again, the saying “too big to fail”, proved simply untrue with the recent appointment of Administrators to Probuild.
Probuild group collapses owing millions.
The collapse of Probuild, one of Australia’s largest commercial construction companies, is a stark reminder that no matter the size of a business, it can fail.
There are often tell-tale signs that a business is in poor health, but this wasn’t necessarily the case with Probuild, a large and prominent company with major projects on its books worth billions of dollars. Given the evidence of aggregate credit limits and cover in place from all Australian insurers, indicators were that this business was not on the brink of failure.
“a collapse of this size will send ripples through the industry and will have a far reaching impact on countless suppliers”
The appointment of Deloitte as Administrators has revealed that their debts extended to hundreds of millions of dollars. A collapse of this size will send ripples through the industry and will have a far reaching impact on countless suppliers.
There is only a small percentage of businesses that can soften the impact of this collapse and they are the ones that have up to 90% of their debts protected by a Trade Credit Insurance policy. It is this cover and protection that allows business owners, CFOs and Credit Managers to sleep better at night comforted by their decision to insure their receivables.