Zurich construction company, Steiner AG, seeks debt restructuring due to liquidity issues

Steiner AG has applied for creditor protection due to a liquidity shortage. The Zurich-based construction and real estate service provider submitted an application for a provisional debt restructuring moratorium to the Zurich District Court. This liquidity bottleneck has affected the company’s ability to pay its bills, which has led to this action.

The company’s financial troubles became apparent when a dispute with the Wetzikon Regional Hospital escalated. Steiner was involved in the construction of the new hospital, a project worth over 200 million Swiss francs. However, problems arose in April when the hospital faced a financial crisis that led to a prohibition on providing assistance from the canton of Zurich. This led to the termination of the contract between Steiner and the hospital.

The dispute between Steiner and the hospital centered around payment issues. The hospital claimed that Steiner had not been transparent about subcontractor costs and payments, leading to outstanding bills and financial difficulties for subcontractors. Steiner, on the other hand, stated that the hospital lacked the liquidity to finance the new building, leading to the contract termination.

In addition to the issues with the hospital, Steiner’s challenges stem from its general contracting business, which is liquidity-intensive and prone to conflicts. The company had previously made the decision to focus on real estate development rather than building projects, which has contributed to its financial difficulties.

The application for creditor protection will allow Steiner to undergo a debt restructuring process that aims to avoid bankruptcy. During this period, the company will operate under the supervision of a trustee to ensure that all creditors are treated equally. This restructuring will help Steiner transition from a general contractor to a real estate development company, resolving its financial challenges.