Receiver yet to calculate total Mainzeal debts; No indication yet whether secured creditor BNZ will get all its money back

More than two months after the spectacular Waitangi Day collapse of Mainzeal Property and Construction the receivers have yet to total up exactly how much the failed company owes.

The first statutory report from receivers Colin McCloy and David Bridgman of PwC shows that the first ranking secured creditor BNZ is owed NZ$11.28 million. The receivers says that BNZ has registered security interests in respect of general security agreements dated January 24, 2006 and October 4, 2012. It also holds specific registered security over individual items of plant and equipment and intangibles.

However, the receivers say that when they were appointed there were 114 specific security financing statements against the Mainzeal companies, including seven by the BNZ.

"The total claims in respect of these registrations cannot yet be quantified as individual claims continue to be assessed," the receivers say.

Subsequent to Mainzeal being placed into receivership, it was, on February 28, placed into liquidation. The liquidators BDO held the first meeting of unsecured creditors, owed at least NZ$70 million, last week. While they were invited to attend, none of the directors, who included former prime minister Jenny Shipley, former Brierley chief executive Paul Collins, Tauranga businessman Clive Tilby and the main driver behind Mainzeal Richard Yan, showed up.

The failure of Mainzeal has again highlighted problems in how sub-contractors are dealt with when there is a large construction industry business failure. Inquiries are being made by the Registrar of Companies into Mainzeal and other companies linked to entrepreneur Yan.

The receivers have identified fixed assets with a value of NZ$12.32 million that they will be attempting to sell, but they are not giving any indication yet whether this will raise enough to pay off the BNZ in full. Also included in the company assets are NZ$5.9 million of residential properties.

The receivers say when they were appointed the Mainzeal companies had 19 residential homes under construction in Christchurch, with interests held in a number of further land sections.

"A formal tender process for these assets is in progress, with a number of interested parties currently undertaking due diligence," the receivers say. Again there is no indication of how much may be raised through these sales.

The receivers also highlight a number of unsecured contingent creditors. They say that bonds issued to contract principals via unsecured bond facilities totalling approximately NZ$33.5 million remained outstanding at the date of receivership. "The extent to which these bonds may be called upon is not yet known."

Also, the Mainzeal companies are party to a number of ongoing and potential legal proceedings in respect of past projects, the receivers say. "The full extent of the associated claims and their impact upon the creditor position of the companies is not yet known."

There were 500 staff working for the Mainzeal companies at the time they collapsed. The receivers have shorn that number to just 14, though some staff were transferred to joint-venture projects and some have been utillised on a casual basis. Preferential employee entitlements of NZ$5.3 million are outstanding, but there are also unsecured employee entitlements of NZ$11.6 million.