Arrow falters, Chows keen
Stonewood Group co-owner Michael Chow says he has contacted the administrators appointed to major construction firm Arrow International (NZ).
Chow said his company had the capital and staff to complete a hotel being built by Arrow for his group in Vivian St, Wellington, and he and his brother John were eyeing other Arrow projects.
The hotel was 70 per cent complete, and Chow said work could restart in a day or two.
Arrow’s voluntary administration has left the industry shocked, after a court decision over a leaky building left it running short of cash.
The company was founded in Dunedin in 1984 by Ron Anderson and Bob Foster, but had grown to have about 200 staff members, with major projects across New Zealand.
Yesterday the company confirmed it was seeking to appoint receivers. An unspecified adjudication had left it in a position where it had to cease to trade.
‘‘This is not the outcome we wanted or expected, but in light of a recent adjudicator’s decision, we had no choice but to take this course of action,’’ the company said in a statement.
‘‘We were greatly surprised by the adjudication in favour of another contractor in a disputed Auckland project, and the financial obligation attached to the decision left Arrow with insufficient cashflow to meet its day-today operating costs.
‘‘We have managed the tough trading conditions which have stressed the entire sector, but this unexpected result has affected solvency to the point that we could not sustain trading.’’
BDO partners Andrew Bethell, Andrew McKay and Colin Gower were confirmed as the administrators and said they would meet with staff as a priority.
Arrow’s construction sites would be closed temporarily while they assessed the position.
Creditors’ meetings will be held in Auckland, Wellington and Christchurch within eight working days.
BDO confirmed that subcontractors’ retention funds had been set aside, as required under recently revised construction contracts legislation.
In Wellington and Christchurch, subbies were seen removing tools from Arrow sites in case the sites were locked down. Outside a job site on Wellington’s Courtenay Place and Taranaki St, a contractor who declined to be named was loading a $4000 piece of equipment into his van.
‘‘It’s only talk, but they’d never tell you [when it happens]. We’ve all been caught out too many times,’’ he said.
At another site on Dixon St, one contractor said he was under the impression that the project could be shut for several days.
Subcontractors and directly employed labourers also downed tools at 100 Langdon’s Rd in Papanui, Christchurch, where Arrow was project managing a new Rebel Sport building.
Arrow said in a statement that the directors wanted to work with administrators in a bid to minimise disruption.
‘‘Importantly, most of our large projects have been completed or are near completion and wherever possible the project teams will be retained to successfully complete the works.’’
Anderson and Foster said they had been ‘‘very fortunate to work on many significant building projects with great people, friends and work associates’’.
‘‘In recent times, the construction industry has become challenging and there is a disproportionate level of risk carried by contractors.’’
The pair are estimated to be worth $130 million each. They remain directors but stepped back from day-to-day management a few years ago.
In Wellington, Arrow has been the lead contractor on a 113 dualkey apartment block for Vicinity in Dixon St. Vicinity director Mike Cole said he was ‘‘100 per cent confident’’ his project would be completed.
Arrow has been one of the preeminent project management companies in the South Island, and in recent years has taken on projects in the North Island.
Industry sources said Arrow had been the topic of conversation at property project manager meetings in the South Island.
Nick Hammond, Arrow’s southern general manager, left the company on Wednesday.
Other managers in Christchurch are also understood to be preparing to leave.
Christchurch-based Steve van der Pol, a former business development general manager who had been with the company for 18 years, said his role was disestablished two months ago.
The Invercargill office had closed recently, and Arrow had moved to shared premises in Dunedin.