By Byron Kaye

SYDNEY – South Africa’s most prominent construction company Wilson Bayly Holmes – Ovcon Ltd. (WBHO), said that it will be leaving Australia because of the “hardline COVID-19” approach. This has impacted South Africa’s property market, and created uncertainty for business.

This is one of the most prominent corporate losses in Australia linked to the pandemic. It also undercuts claims by government that two years of lockdowns and stop-start stimulus programmes saved jobs and businesses.

WBHO filed a Johannesburg Stock Exchange report stating that it had pulled financial support from Probuild Australia and placed it in external administration due to “project delivery ability… being negatively affected by severe COVID-19 restrictions”. The risk was outweighing the reward.

WBHO stated that it expects to report a loss in July and December due to trading losses, impairment charges and non-recoverable tax assets. The news caused a 27% drop in shares, the largest decline since 1998.

Separately, the builder said that government’s COVID-19 hardline response (border closures/lockdowns and enforced working-from-home) had had a “considerable impact” on the property market as well as other sectors such as the leisure or tourism industry.

According to the report, restrictions “have created high levels of uncertainty business in Australia” and had significantly reduced the demand for these sectors.

Probuild was founded in 1987 and has worked on many high-profile commercial projects, including the new headquarters of biopharmaceutical giant CSL Ltd. It also built a headquarters for police in Victoria, Australia’s second most populous state.

A year ago the government stopped a purchase of Probuild by China State Construction Engineering Corp Ltd worth A$300million ($217 millions) on national security grounds.

Josh Frydenberg’s spokesperson declined to comment on the matter. He had blocked it.

Probuild’s administrator Sal Algeri, of Deloitte Turnaround & Restructing, in a statement said he would assess the builder’s financial position and begin work on finding a new owner.

($1 = 1.3850 Australian dollars)