Mainzeal likely to be put in liquidation

CATHERINE HARRIS
Last updated 05:00 23/02/2013

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Mainzeal's receiver PricewaterhouseCoopers says the collapsed construction company could be put into liquidation.

A liquidator has wider powers than a receiver to ensure all creditors, not just preferred creditors, get a fair share of remaining assets.

Subcontractors, who are owed millions in retention payments by Mainzeal, are among the unsecured creditors.

One of the receivers, Colin McCloy, said it was likely the company would be wound up.

"There's every chance it will. The company's clearly insolvent. It doesn't have a future. So I think liquidation's inevitable."

A liquidator has greater powers to investigate the cause of a company's demise and ensure payments are equalised among creditors. Its powers include clawing back payments from preferred creditors if necessary to ensure fairness.

McCloy said any payment to subcontractors "would probably come via liquidation".

Meanwhile, the chairman of Richina Pacific, Mainzeal's ultimate owner, has communicated with its residual small shareholders via its website.

John Walker, who is based in the United States, said Richina had guaranteed certain obligations to Mainzeal Property and Construction and provided funding to support it. Now Richina Pacific (RPL) was assessing its exposure to Mainzeal as a result of the receivership.

Walker said Mainzeal Property had been wholly owned by RPL until 2009, when shareholders approved it becoming a separate legal entity and become shareholders in Mainzeal's parent, Mainzeal Group, instead.

Richina Pacific - which was delisted from the NZX in 2009 and registered in Bermuda - also has property interests, tannery operations and an aquarium in China.

Those businesses and assets were continuing to operate normally, Walker said.

Under the complex structure, Mainzeal Group is owned by Richina (NZ) LP, and its directors are unknown, as are the directors of Richina Pacific's owners, REH LP.

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- BusinessDay.co.nz

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