The receivers of collapsed Mainzeal Property and Construction have taken the axe to staffing levels of the collapsed company.
Mainzeal, the country's third-largest construction company collapsed on Waitangi Day after its last remaining director Richard Yan asked the firm's bank, BNZ, to put it into receivership. More than 400 Mainzeal workers, hundreds of sub-contractors and dozens of major construction projects were put in limbo.
Receivers Colin McCloy and David Bridgman, partners at PwC confirmed today that "a number" of Mainzeal staff have been made redundant. Fairfax reported that about half of the staff - 200- had lost their jobs.
The receivers also confirmed that they are in ongoing talks with parties interested in buying the business and assets of Mainzeal.
McCloy said that they have been assessing the situation of all Mainzeal sites, and will be endeavouring to talk to all site owners in the coming days.
As well as making an unspecified number of people redundant the receivers had also since last Friday been working with all contractors and sub-contractors to give them access to the sites, "to ensure all parties involved (from staff to contractors and residents in some cases) are safe and that property that rightfully belongs to contractors can be retrieved in a controlled manner".
“We want to thank all parties involved in this receivership for their patience, we understand it is a challenging time for everyone. We’re continuing to evaluate individual projects in an effort to restart or transfer work on some sites as soon as possible, subject to contractual arrangements and our statutory obligations as receivers,” McCloy said.
“We are currently in talks with some parties interested in buying the business and assets of Mainzeal, either as a whole or by segment. We understand the importance of a prompt and efficient management of this receivership and we remain committed to working as quickly as possible through this receivership.”
The receivership will affect the Christchurch rebuild in various ways. Mainzeal is part of a joint venture with MWH Global to work with Vero, AA Insurance and SIS Insurance to rebuild homes and other buildings.
Mainzeal is thought to have worked on NZ$7.5 billion of projects over the years.
The receivership announcement followed hard on the heels of the resignation of independent directors (former National Prime Minister) Jenny Shipley, (former Brierley CEO Paul Collins) and Tauranga businessman Clive Tilby.
They put out a explanation of their decisions to resign from Mainzeal Group (which is not in receivership) the day before the receivership of its subsidiary Mainzeal Property and Construction Ltd.
"We did so because we did not have sufficient confidence in our ability to continue to perform our duties as independent directors, as the undertakings given and the basis on which we had undertaken to serve as directors had changed and so we had no option but to tender our resignations," they said, adding they resigned from Mainzeal Property and Construction in December at the request of the shareholder Richard Yan.
"We agreed to accept the role of Directors of Mainzeal Group Ltd based on the undertakings and assurances given by the shareholder at that time. Sadly these have now changed which have led to our resignations," they said.
"That company had passed through a very difficult year in the construction sector, the impact of legacy issues around leaky buildings, a large contract with disputed payments and a Chinese supply chain scheduling and delivery challenge. The four Directors resigned the Mainzeal Group board on Tuesday when it became apparent financial undertakings from its shareholder, Richina Pacific, for Mainzeal Property and Construction were no longer in place and the further equity commitments were uncertain or conditional."
The independent directors said a working capital facility with the BNZ was withdrawn as a result of the lack of support from Mainzeal's shareholders, leading to the appointment of receivers.
“As independent directors of MGL, the holding company, we have done everything we could to try and avoid this painful outcome. We are fully aware and very saddened by the subsequent impacts the receivership may have on Mainzeal employees, creditors, subcontractors and others," they said.
“It is deeply disappointing that we were unable to secure the support that would have allowed Mainzeal to continue to operate. Mainzeal Property and Construction was a very good company, had a significant workload of building in Christchurch and if we had managed to gain the undertakings necessary, it was working toward a positive cash flow and profitability in 2013.”
Yan hasn't yet been heard from.