Mainzeal workers slashed to 14 full-time from 500: receiver's report

Mainzeal Group's receivers have slashed the number of full-time workers to just 14 from 500 as they focus on quantifying liabilities at the failed construction firm, their first report says.

The group owes $11.3 million to its only first ranking secured creditor, Bank of New Zealand, the report from Colin McCloy and David Bridgman of PwC says. In addition, there are 114 specific security financing statements (PMSIs) for the supply of goods and services, including seven from BNZ, which are still being assessed.

Unsecured trade creditors are the biggest by value at $70 million, made up of $51.7 million in accounts payable and $18.3 million in retentions held. That does not include payments and invoices for January and February.

Of preferential creditors, employees are owed $5.2 million and the Inland Revenue Department is likely owed $600,000, according to company records. The receivers also identify contingent liabilities including $33.5 million in contractor bonds. How much of the bonds may be called is not known yet, the receivers say.

The receivers have kept on nine construction management staff to assist in completing projects and recover receivables, three finance and admin workers, and two asset management workers. Other former employees have been hired on a casual basis.

Mainzeal's key assets are listed at book value of $111.4 million, of which $71 million are related party receivables, $21.2 million are contract receivables, fixed assets $12.3 million and residential properties $5.9 million. Its 50 percent interest in a Christchurch project management services firm is not quantified.

Liquidators have been appointed to the commercial construction sector player Mainzeal Group, less than a month after one of its primary trading arms, Mainzeal Property and Construction, was placed in receivership.

The entities in receivership are: Mainzeal Group, Mainzeal Property and Construction (in receivership), Mainzeal Living (in receivership), 200 Vic (in receivership), Building Futures Group Holdings, Building Futures Group, Mainzeal Residential, Mainzeal Construction, Mainzeal, Mainzeal Construction SI, MPC NZ and RGRE.

Former Prime Minister Dame Jenny Shipley and former Brierley Investments chief executive Paul Collins resigned as directors of Mainzeal Property and Construction in December, at the request of Mainzeal and Richina group principal Richard Yan, an Auckland-based businessman, but remained directors of Mainzeal Group until just before the February 6 MPC receivership.

(BusinessDesk)