Mainzeal leaves firm in debt, staff laid off

MATHEW GROCOTT
Last updated 08:00 09/02/2013

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A Palmerston North-based construction firm has been left $450,000 out of pocket and has had to lay off seven staff after the collapse of Mainzeal.

Kernow Construction was working on 11 Mainzeal sites in Christchurch when the construction giant was placed into receivership this week.

Company director Brett Wistrand said with suppliers to pay and hundreds of thousands of dollars in revenue gone it was about survival.

"We're just trying to work through it, just got to move on and try to survive."

Mr Wistrand said he had 14 staff in Christchurch, including six from Palmerston North. He had to tell seven staff on Thursday they were being laid off as he tried to cut costs.

Unlike other tradies who have gear still stuck in Mainzeal construction sites Kernow staff had got most of their equipment out on Tuesday.

Mr Wistrand said he "had an inkling" something was up with the company on Tuesday but said the news of the receivership had come not only as a shock to him but to managers at Mainzeal's Palmerston North and Christchurch offices.

"No-one in the management team I deal with in Palmerston North or Christchurch knew what was coming; it blindsided them."

Mainzeal was placed in receivership on Wednesday. Work has ground to a halt at its building sites around the country and many subcontractors are thought to be owed millions of dollars.

Asked if he expected to see any of the $450,000 he expected to lose back in the future, Mr Wistrand said he had spoken to an employee of receivers PricewaterhouseCoopers yesterday and had been told to expect the worst.

"I'm expecting to get nothing, none of that back, the receiver . . . said prepare for the worst."

Mr Wistrand said he was grateful to his suppliers who were being supportive. He owed the suppliers money for materials and would make repaying those debts a priority once he was in a position to do so.

The suppliers understood his plight and were being flexible he said.

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- © Fairfax NZ News

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