Last week’s surprise announcement that RCR Tomlinson Ltd (ASX:RCR) has appointed administrators has spurred unrest among the solar developers that chose to rely on the company’s services and are now reportedly calling on bank guarantees.
The Australian Financial Review (AFR) reports that a wave of claims by customers of the Aussie engineering major could force banks and insurers to pay out tens of millions of dollars in bank guarantees and insurance bonds.
According to the AFR report, RCR was working on nine solar projects with a combined value exceeding AUD 1 billion (USD 724m/EUR 639m) before the announcement. The newspaper also says that RCR’s solar business will be shut down if administrators at McGrathNicol Restructuring fail to find a buyer.
Meanwhile, The West Australian writes, citing an official, that RCR has put on hold work on the 30-MW expansion of the Greenough River solar farm. The engineering company got the job from Synergy-backed developer Bright Energy Investments (BEI). A spokesperson for Western Australia’s energy minister Ben Wyatt told the newspaper that BEI has reserved its right to reassign the principal contract.
An example for a company relying on the bank guarantees is New Energy Solar Ltd (ASX:NEW), which in June 2018 committed to acquire from First Solar Inc the 48.5-MW Manildra solar power plant, built by a subsidiary of RCR. In a statement last week, New Energy Solar said that the contractor is still obligated to complete a small number of items so that the facility can reach full completion. It stressed that this is covered by bank guarantees.
Pacific Hydro, which hired RCR to build the 100-MW first stage of the Haughton solar farm in Queensland, said separately that it has secured the construction site as it works to respond to the situation. “We will take all of the steps necessary for construction to continue, while maintaining the safety and security of the site,” stated Rachel Watson, Pacific Hydro’s Interim CEO.
Consultants at Rystad Energy said, as quoted by the AFR, that RCR had engineering, procurement and construction (EPC) contracts for 956.5 MW of solar projects in Australia as at the end of November.
(AUD 1.0 = USD 0.724/EUR 0.639)
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