Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Leaky buildings, Chinese supply botch fell Mainzeal

buildings, Chinese supply botch fell Mainzeal over just $20M

By Pattrick Smellie

Feb 6 (BusinessDesk) - One of New Zealand's best-known commercial construction firms, Mainzeal, placed its operating business in receivership as a combination of leaky homes suits and a botched supply chain from China combined to take the company down.

In a dramatic afternoon on New Zealand's national day, Waitangi Day, Mainzeal Property and Construction (MPC) was placed in the hands of receivers at the accounting firm, PwC.

At the same time, the former Prime Minister Dame Jenny Shipley, former head of Brierley Investments Paul Collins and a Tauranga businessman, Clive Tilby, resigned from the board of Mainzeal Group, which owns MPC, which they had already left last December.

The joint statement said all three had resigned from MPC last December at the request of Richard Yan, the ultimate shareholder in Mainzeal and a celebrated Auckland business leader who came to New Zealand from China in 1981 for tertiary education and stayed while building business links back to China.

Yan is chairman of the Richina group of companies based in Auckland and Shanghai, and spoke at the launch of the government's China trade strategy in Auckland last year.

BusinessDesk understands the receivership is over the failure to make a $1.8 million payment on an outstanding $20 million credit facility, and that this was the last straw in a string of difficulties the company had faced in recent years.

MPC had been emerging from the aftermath of a multi-million leaky building suit involving Hobson Towers, a two-tower, 97-unit block in Hobson St, Auckland.

More recently, it's understood MPC had been caught in supply chain difficulties involving the New Zealand arm of the King Façade Decoration Engineering Co, a Shenzhen-based company supplying product to the New Zealand market.

Yan's company, Richina, was in a joint venture with King Façade to supply Mainzeal with product, according to King Façade's New Zealand website.

Mainzeal is a well-known New Zealand construction company, and a major player in the Christchurch post-quake rebuild.

In a statement, receivers PwC said Yan had advised them that MPC had suffered "a series of events that adversely affected the company's position, coupled with a general decline in commercial construction activity."

Shipley, Collins and Tilby said in a statement that MPC had been "meeting its obligations as they fell due and had facilities with its bankers that enabled it to continue to operate."

"We agreed to accept the role of directors Mainzeal Group Ltd based on the undertakings and assurances given by the shareholder (Yan) at the time. Sadly, these have now changed, which have led to our resignations."

The company had been "working towards a positive cashflow and profitability in 2013."

Insurance group Vero, which uses Mainzeal as a major partner in the commercial reconstruction of Christchurch, said it had "not been using Mainzeal for any domestic projects."

"They have been involved in a small number of our commercial reinstatements. We will continue to work closely with our customers to ensure their progress is not impacted.

"This will not affect the overall recovery in Christchurch, the company said in a statement.

Mainzeal's website shows it had been reacting to the lack of demand for commercial construction by moving into construction of affordable housing projects, which has emerged as a key political issue in 2013.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

'Irregular Accounting': Voluntary Suspension Of Fuji Xerox Govt Contracting

This suspension gives the Ministry of Business, Innovation, and Employment time to understand the full implications of the report from FUJIFILM Holdings into irregular accounting practices at FXNZ. More>>

ALSO:

MPI: Cow Disease Detected In NZ For First Time

MPI is responding to the detection of the cattle disease Mycoplasma bovis in a dairy herd in South Canterbury... The disease is commonly found in cattle globally, including in Australia, but it’s the first detection of it in New Zealand. More>>

South Island Flooding: Focus Moves To Recovery

As water recedes throughout flood-impacted areas of the South Island, Minister of Civil Defence Nathan Guy has praised the efforts of those who were involved in the response to the flooding... More>>

ALSO:

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fund For PPP Plans: Govt Embraces Targeted Rates To Spur Urban Infrastructure

The government's latest response to the Auckland housing shortage will see central government and private sector firms invest in 'special purpose vehicles' to fund essential roading, water and drains that Auckland Council can't fund without threatening its credit rating. More>>

ALSO: