Mainzeal collapse creates aftershocks

GREG NINNESS
Last updated 05:00 17/02/2013
Mainzeal Property and Construction
PHIL DOYLE/Fairfax NZ

FOR SALE: Mainzeal Property and Construction's head office on Victoria St, Auckland.

Relevant offers

Latest business

Market watchdog's KiwiSaver warning Businesses paying bills faster BNZ boss shakes up senior team Foodstuffs HQ to stay put for now Never cross your feet in Japan House 'clearly' dropped after quakes Wananga's wonky course costs repaid Lyttelton Port boss pay rise 'unjustified' Troubled van Eyk tipped to sell NZ arm Westland Milk not satisfied with record result

The ripples from the collapse of Richard Yan's Mainzeal Property and Construction are spreading, with the company that owns Mainzeal's head office building being tipped into receivership, related company King Facade Ltd going into voluntary liquidation and rumours that a major property asset on Waiheke Island has been sold.

On Wednesday, receiver Colin McCloy of PricewaterhouseCoopers took control of 200 Vic Ltd, the company that owns Mainzeal's head office building in central Auckland.

McCloy is also the receiver of Mainzeal Property and Construction which, along with 200 Vic, is part of Yan's Richina group of companies.

200 Vic purchased the building on a prominent corner site opposite Victoria Park in 2011 and it was refurbished to what some in the industry have described as a luxurious standard for Mainzeal's head office.

The property is on a leasehold title with the freehold land under the building owned by the Auckland Council.

200 Vic paid $4.8 million for the leasehold title and BNZ, which is also Mainzeal's main secured creditor, holds a mortgage over the property securing up to $19.5m plus interest.

Meanwhile, on Waiheke Island, a large block of land on which Richina intended to develop a luxury resort is believed to have been sold, although the deal has not yet settled.

A Richina subsidiary purchased several neighbouring properties on Waiheke, including the Te Motu vineyard and winery, in 2010. It paid $6.2m for the properties which have a combined land area of 20ha, with BNZ holding mortgages securing $9.16m over them.

Richina intended to build a luxurious Tuscan-styled resort, which was to have been managed by the Langham hotel chain, but those plans appear to have come to nought, although The Langham Auckland's managing director, Jeffrey van Vorsselen, said the company was still committed to the project.

However, well-informed sources on Waiheke say a buyer has already been lined up to acquire the property, although the Sunday Star-Times was unable to confirm this.

In another development last week, the Richina-owned company King Facade Ltd went into voluntary liquidation, but a related company, King Facade (NZ) Ltd, appears to have been unaffected by the move.

King Facade (NZ) is a joint venture between Richina and Chinese company Shenzhen King Facade Decoration Engineering Co, which supplies glass cladding products to the construction industry. The extent of Richina's future activities in this country remains unclear.

Mainzeal was the company's main New Zealand asset but last year, as Mainzeal's financial difficulties mounted, Richina set up a parallel group of companies under the Mainzeal Group banner, including Mainzeal Ltd, Mainzeal Construction, Mainzeal Construction SI and MPC NZ Ltd.

These are separate to Mainzeal Property and Construction and are not included in its receivership, although they all have the same ultimate owner, a limited partnership managed by Richina.

Unlike Mainzeal Property and Construction, the new companies appear to have little, if any debt, but their financial situation is not clear because they have not published their accounts.

Ad Feedback

There has been speculation in the construction industry that the new companies would specialise in building projects which utilised King Facade products, but at this stage that is uncertain.

Richina is a labyrinthine organisation and the companies it controls are often characterised by frequent changes of name, shuffling of shareholdings and changes of directors.

For example, the shares in the company Richina used to buy the Waiheke properties were originally owned by another Richina company, which at the time was called MLG Ltd.

But this company has changed its name three times since 2010, from M.L.G Ltd to Richina Capital Partners Ltd to MLG Ltd and finally to its current name, MLG Trading Ltd.

This has been accompanied by a change in the company's ownership structure, with its shares being transferred from the Virgin Islands-based Richina Holdings (BVI) Ltd to Richina Holdings (NZ) Ltd.

The shares in the original vineyard-owning company have also been transferred several times, from MLG to other Richina companies, firstly to Waiheke I LP and then to Te Motu Holdings Ltd, a company which in turn has changed its name three times in the past 18 months.

All of which can make it very difficult for anyone trying to keep track of the company's structure and its assets.

Many of the changes of names and shareholdings within the Richina group companies were arranged from what Richina calls its administrative office in Petaling Jaya, Malaysia.

When the Sunday Star-Times telephoned that office last week, there was no answer.

- Sunday Star Times

Special offers

Featured Promotions

Sponsored Content