Iron foundry on the rocks
Precision Foundry’s 85 staff members went on Christmas leave without knowing the Auckland metal foundry had been placed in receivership.
Precision, formerly Masport Foundries, was taken over in 2014 by private-equity firm Challenge Partners. Precision Foundry is the trading name of MFL Ltd.
Challenge Partners director Paul Ayers said Precision Foundry had faced a number of challenges over the past year.
‘‘Particularly the continued high New Zealand dollar, lack of margin preventing reinvestment in the ageing plant and then customer confidence being shaken by a 10-month period of reduced production following significant unforeseeable failure . . . MFL has exhausted its financial reserves,’’ Ayers said.
E tu¯ industry co-ordinator Ron Angel said the firm’s workers were sent on leave without being told about the receivership.
‘‘We are deeply appalled that the employer has done this, knowing full well this was coming and that their workers didn’t know. Nor did the union.
‘‘We understood the company had some financial challenges, but this has come as a complete surprise. We are now working hard to contact our members.’’
The union is also seeking an urgent meeting with the receiver.
‘‘It’s another example of a company which has been downsizing over time and now it looks like the end has come,’’ Angel said.
KordaMentha receivers Grant Graham and Pravin Bhana were appointed yesterday, Ayers said.
Graham said the receivers were working with management to consider the firm’s options.
‘‘We will write to all staff this week confirming their individual entitlements and updating them on the situation,’’ Graham said.
Ayers said other firms under Challenge Partners’ portfolio were unaffected.
These included Fieldmaster, plastics engineering firm LEP and Shuk Engineering.
Precision Foundry was one of the country’s biggest manufacturers of cast ductile and alloy iron. MFL products can be found in many areas of equipment manufacture in Australia and New Zealand.
Ayers, a former British naval officer, set up Challenge Partners in 2012 with Myles Cooper, the company’s chief executive.