Work in progress on hire firm’s $20m debt, say receivers
Receivers have sold some assets and are negotiating further sales following the failure of Auckland crane hire company Tower Cranes NZ but it’s too early to assess the outcome for creditors.
Lara Bennett and John Fisk of PwC were appointed as receivers to Tower Cranes and related company Tower Cranes Assets on September 4.
According to their first report released yesterday, the two companies owed around $18.5 million to secured creditors, most of which is claimed by first-ranking security holder BNZ ($13.3m), and about $2m to unsecured creditors.
Estimated assets available for sale at the time of receivership amounted to about $21.5m, the receivers said.
The company’s main business was primarily in the greater Auckland area and included leasing of commercial construction equipment such as tower and mobile cranes, hoists and other vehicles.
In the two years leading up to receivership the company had substantially expanded and upgraded its fleet, Bennett said in her report.
“During the same period, it experienced some difficult trading conditions in the construction sector, including a number of substantial bad debts due to other industry failures as well as cost overruns. These issues adversely impacted its ability to meet payment obligations on a timely basis.”
It’s understood Tower Cranes was owed money from the collapse of Ebert Construction earlier this year.
Excluding the BNZ’s claims, there were 47 financing statements registered against the two Tower Cranes businesses, the receivers noted.
“We are continuing to review all registered security interests and the associated value of the goods/assets that may be held in respect to each.”
To date the receivers have concluded sales of certain assets and some negotiations are continuing.
“Due to the volume of large-scale assets and their specialist nature, a further realisation process is likely following completion of initial sales.”
Tower Cranes’ receivership is the latest in a long list of construction industry failures in recent times including:
● Mainzeal went under in 2013 with losses of more than $110m;
● Fletcher Construction is recovering after racking up losses of nearly $1b;
● Trouble arose at Alexandra
Park where Canam last year left one of two big apartment blocks, replaced by CMP Construction;
● Christchurch-headquartered Corbell Construction went into liquidation in December, with $35m of projects under way;
● Arrow International went into voluntary administration in February after a contractual dispute left it with insufficient cash flow to meet operating costs;
● Fletcher’s work on the $703m NZ International Convention Centre and the $1b Commercial Bay is delayed, resulting in the developers withholding millions.
● National builder Ebert Construction with creditor claims of more than $45m but assets of only $30.1m, according to the latest report, which predicts there will be no money for unsecured trade creditors.