Failed Mainzeal faces $93.5m in claims
The liquidators of Mainzeal Property and Construction estimate the failed construction firm faces at least $93.5 million in claims from unsecured creditors.
The amount from secured creditors is not known yet, the liquidators said in their first report released yesterday.
Total unsecured claims across four trading companies in the Mainzeal group of companies in liquidation amount to $117.6m so far while the total value of their assets not subject to security or charges is recorded at $123.6m
However, the liquidators, Andrew Bethell, Brian Mayo-Smith and Stephen Tubbs of BDO, said they were not confident of the accuracy of the information supplied in the companies' accounts.
They could not say yet how much, if anything, preferential and unsecured creditors would be paid.
They said while the information provided from the companies' records provided some insight, "we have concerns about the accuracy of this information and believe that many balances warrant further investigation".
The statement of affairs did not include legal claims, performance bonds and other contingent creditors.
It also did not include allowances for such costs as the cost of selling assets, receivers' fees and legal fees.
While 12 companies in the group are in liquidation, only four were trading, the liquidators said.
Three of the trading companies were also in receivership and under the control of receivers from PricewaterhouseCoopers.
The receivers were expected to hand "residual assets" to the liquidators when their appointer was repaid in full.
The appointer of the receivers was Mainzeal shareholder Richard Yan.
The companies were part of a complex group relying on overseas entities, liquidators said. The statement of affairs shows Mainzeal Property and Construction (MPCL), the construction company and the main trading company for the group, had assets with a book value of $95m which are not subject to security or charges by others. .
Those assets subject to specific security were valued at $11.9m.
One of the lenders with security over those assets was BNZ owed $300,000 but it was also owed an unknown amount on a performance bond. The amount owed to other secured creditors of MPCL was unknown at this stage.
Claims by unsecured creditors of MPCL amounted to $93.5m so far.
Of those, trade creditors were claiming $51.7m, and another $18.3m of retentions were being claimed.
Employees, as preferential creditors, were claiming $6.6m. They were also claiming another $11.5m as unsecured creditors.
Inland Revenue was owed $600,000 by MPCL.
BNZ was claiming $9.6m from 200VL, one of the trading companies which owned Mainzeal's head office in Auckland located at 200 Victoria Street and other property.
The liquidators said while Mainzeal records said it was owed $24.5 million from trade and other debtors for construction projects the realisable value was likely to be a lot less.
The liquidators said factors in the Mainzeal group of companies' demise included:
Uncertainty over whether a lot of lending between the companies in the group would be recovered.
Substantial losses on some large construction contracts.
Substantial existing and pending legal claims.
Substantial remedial works.
Large loss on the set up of King Facade.
Working capital needed for the set up and running of Mainzeal Living.
Declining work volumes.
An adverse settlement on a major infrastructure contract.
AT A GLANCE
Mainzeal Property and Construction (MPCL) has assets with a book value of $95m which are not subject to security or charges.
Mainzeal Group has assets with a book value of $22.5m which are not subject to security or charges .
But liquidators have concerns about the accuracy of company financial information.
Claims from unsecured creditors of MPCL amount so far to $93.5m.
That includes trade creditors claiming $51.7m plus retentions of $18.3m.
Employees have preferential claims of $6.6m and unsecured claims of $11.5m.
A creditors' meeting is to be held on April 3 in Auckland.