Horizon Energy owed $4m by Mainzeal
Horizon Energy says its wholly-owned Aquaheat subsidiary is staring at a maximum pre-tax loss of $4 million from the collapse of Mainzeal Property and Construction.
The announcement comes five days after the East Coast electricity distribution monopoly cut it earnings forecast by 21 per cent due to higher costs of transmission, regulatory prices changes, and expenses relating to its acquisition of Aquaheat.
At the time, the firm said it expects net profit for the year to March 31 to come in at $3.4 million, down from a previous forecast of $4.3m year - but critically this excluded the Mainzeal exposure.
The country's third biggest construction firm collapsed on Waitangi Day, leaving 400 staff, hundreds of sub-contractors and more than 40 building sites nationwide in the lurch. Aquaheat is a supplier of commercial and industrial heating and air conditioning services.
The receivership means Horizon Energy's losses will widen by another $2.9m in after tax terms, leaving it with a forecast bottom line profit of around $500,000 for the 2013 financial year, well down on the $6.4m earned in the previous year.
The firm said Aquaheat's expose relates to its role as a Mainzeal sub-contractor, and the retentions retained by the construction firm on both past and current contracts and outstanding accounts for December and January.
"It is both fair and morally right for sub-contractors to have a right to recover their share of unpaid work directly from the client in such cases where the client has not paid Mainzeal," said Horizon Energy chairman Rob Tait.
"We will be discussing avenues to recover direct from the clients as much of our outstanding Mainzeal debt as possible".
At the time of the receivership, Aquaheat had a total of 37 projects with Mainzeal that were in various stages of completion. Of this, 20 (worth about $1m) were completed and subject to retention payments.
Shares in Horizon Energy, which are 78 per cent held by Eastern Bay Energy Trust, rose 1.2 per cent to $3.40 in morning trade.