Large-scale developer Mainzeal Property and Construction, until recently chaired by former prime minister Dame Jenny Shipley, has been placed in receivership.
The company’s sole remaining director, Richard Yan, made a request to BNZ for receivership, resulting in the appointment of Colin McCloy and David Bridgman of PwC as receivers today.
According to a statement from PwC, Mr Yan advised that a series of events had adversely affected the company’s financial position, coupled with a general decline in commercial construction activity.
In the absence of further shareholder support, the company could no longer continue trading.
The company employed upward of 400 staff.
Mr McCloy says the receivers are committed to “doing the best we can for the suppliers, staff and subcontractors of Mainzeal.”
The company forms part of the Mainzeal Group, which is owned by Richina Inc, a privately held New Zealand-based company with a strong China focus.
Companies Office records show several directors ceased holding office with Mainzeal in December, including chairwoman Shipley and former Brierley executive Paul Collins.
In 2011 the company won the RMB Commercial Project of the Year for its build of Lion Breweries' state of the art brewery in East Tamaki.
Joint venture 'safe'
Mainzeal recently formed a joint venture with planning consultants MWH to fix earthquake-damaged homes in Christchurch insured by Vero, AA Insurance and SIS Insurance.
MWH Mainzeal's programme manager of the Canterbury earthquake recovery, Chris Pile, told NBR ONLINE he was formally notified of the receivership this afternoon and it came as a shock.
"We certainly didn't see it coming and I don't have any details as to what the cause is or the magnitude."
The joint venture company, which project-manages earthquake repairs, has almost 200 staff, with about half employed by Mainzeal – one of many construction companies involved in the rebuild.
Mr Pile says there will be a staff meeting tomorrow morning.
"It's unfortunate for Mainzeal but as far as the earthquake recovery goes they're a relatively small player, in terms of the total contruction capacity available."
Mr Pile says MWH Mainzeal will work with the receiver to come to agreeable terms.
"If we can't come to an agreement with receiver then MWH has got the ability under the contract to take over and self-perform the whole thing."
Still, the receivership will be a jolt for Christchurch businesses as it was thought the rebuild was taking off.
One shocked company owner, who claims to be owed more than $250,000 by Mainzeal, told NBR ONLINE: "The thing is, now [the receivers have been called in] they will be paid and the bank will be paid but we won't."