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NZ unit of troubled Hastie Group to keep trading

Monday 28th May 2012

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Hastie Group's New Zealand commercial heating and ventilation businesses will operate as normal after its Australian-listed parent called in administrators, following losses which are being investigated by the Australian Securities and Investments Commission.

The Sydney-based company appointed Ian Carson, David McEvoy and Craig Crosbie of PPB Advisory as its administrators of the firm after negotiations with lenders and investors to capitalise broke down after Hastie found a A$20 million accounting irregularity in 2009. The New Zealand holding company, Hastie Holdings (NZ), was placed into receivership, with Andrew Grenfell and William Black of McGrathNicol appointed to oversee the wind-down.

"The individual New Zealand business units, Aquaheat Industies Ltd, Hastie New Zealand Ltd, and Hastie Services Ltd are not in receivership and continue to be operated by their existing directors and management team on a business as usual basis," the receiver said in a statement.

Hastie's New Zealand unit employs more than 500 people and provides professional installation and maintenance of heating, ventilating and air conditioning systems for both commercial and industrial applications, according to its website.

Last year, the group transferred all of its New Zealand units into Hastie Holdings (NZ), valuing the local assets at $15.1 million.

It subsequently repaid its New Zealand bank debt, and replaced it with an intercompany loan as part of a group-wide debt restructure.

That restructuring included a A$160 million capital raise, including funds from Lazard Australia Private Equity, to repay some A$145 million of bank debt.

Hastie Group reported a loss of A$149 million in the six months ended Dec. 31 after writing down its goodwill, brand, and land value by A$37.3 million.

The group's accounting discrepancy appeared to have come from "the deliberate actions of a current employee (on suspension) and that potentially some current and former senior management may have participated," and it's been referred to ASIC, it said in a statement last week.

Trading in the shares was halted last month with the stock at 16 Australian cents, valuing the company at A$22 million, having plunged from A$8.25 apiece in February last year.

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