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Fletcher reveals Mainzeal exposure

Fletcher Building and its subsidiaries, including Placemakers, are owed $7.5 million from the collapse of Mainzeal Property & Construction.

Fletcher ceo Mark Adamson says that gives it a huge incentive to ensure the projects and subcontractors do not fall over because of Mainzeal's collapse.

In a phone conference following today's half-year results, he says taking over half-finished projects can be fraught with problems but its staff are assessing every Mainzeal job with receivers PwC.

"It is our intention to try and save as many of them as possible."

"Between ourselves, some of the other major contractors in New Zealand and with the management of the receiver that we will manage to avoid the worst excesses of what could be very ugly if we're not careful."

Not only does it want to protect its supply base for future contracts, it is owed $7.538 million on Mainzeal contracts, Mr Adamson says.

"These people owe us money and I don't want to see them go bust. It is a bit of a minefield.

"We've got our experts working very closely with the property developers and the receivers but we are looking to put our best foot forward and show some goodwill in terms of returning some employment from Mainzeal and finishing off some of the work that they've embarked upon."

MWH, Mainzeal's joint venture partner in its earthquake repair management business, announced yesterday it had bought out the collapsed company's half, rebranded to MWH Recovery and employed 86 people. 

In an update released this afternoon, receivers Colin McCloy and David Bridgman say limited work has resumed on a Kapiti Coast District Council building site and it is hoped work at other sites will resume soon or, more likely, be transferred to other contractors or the client. 

Mainzeal, New Zealand's third-largest construction company, went into receivership on Waitangi Day after troubles with "shareholder support".

PwC has already made about 200 staff redundant.

dwilliams@nbr.co.nz

More by David Williams

Comments and questions
6

Oh what a tangled web!

How magnamous of Fletchers.

This could be a cheap way to takeover a company? I bet they get more than $7.5m back from their generosity. At least more than the subbies will get.

What a negative b......d you are!

No, not a negative B.....d

Just a realist who doesn't believe every press release I see, especially released by a competing corporate.
Do you really believe Fletchers are in this for the benefit of Mainzeal or their creditors?

Fletchers will be celebrating Mainzeal's demise - it takes out their biggest competitor in the construction sector.

One assumes you might be a naiive b.....d.

As someone whose conducted a receivership of a couple of builders/developers, you're dreaming if there is money left in the contracts.
Typically, they milk money out of the client without reaching completion points or contracted milestones, which means anyone who takes over the contract is playing catch-up for out of the water contracts. That, combined with a client who will ask for damages and try every means possible to delay or void the contract.

Fletchers is best to wait and negotiate new contracts with clients as the receiver disclaims them.

Bob, You might be dreaming if you think Fletchers will be completing contracts at a loss!
The Doctor was alluding to Fletchers probably not being as honest as their press release alludes to - he is probably right.
Fletchers have just announced they are tightening up things, including possible job losses. So they definitely won't be offering charitable donations or free resources on Mainzeal contracts.