Mainzeal, one of New Zealand's best-known commercial construction firms, 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 yesterday afternoon on Waitangi Day, Mainzeal Property and Construction 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.
Mr 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 is 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.
Mr 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 Mr 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".
Dame Jenny, Mr Collins and Mr 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.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Sky says Roy Morgan's Neon number is too low, reveals On Demand usage
- Fellet unmoved by media company 'for-sale' signs as Sky TV mulls capital options
- Sky and Duco vs the Parker pirates: a Q&A
- $100m later, Woosh Wireless goes into voluntary administration
- Commerce Commission files against Vodafone, alleges misleading 'Red Essentials' mobile plan
Most listened to
- Can Arvida continue at this pace? CEO Bill McDonald weighs in
- AFT’s Dr Hartley Atkinson says the country will increase overseas revenue but it will be a “drip feed”
- US drone shocks in Pakistan with frightening questions in EgyptAir crash on Foreign Affairs Scope with Nathan Smith
- AMA: Orion boss Ian McCrae delivers 10 quickfire answers to 10 quickfire questions from readers
- Government debt will top out at about 26% of GDP, well below most other countries, says Professor Niall Ferguson