Friday 17th October 2014
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Infracon, the civil construction firm owned by the Tararua and Central Hawkes Bay district councils, has been sold to local civil engineering company Higgins Group out of liquidation for an undisclosed sum.
Liquidators John Fisk and Tony Pattison of PwC said they have entered into a conditional agreement to sell Infracon as a going concern, which they hope to conclude by the end of November. No price was disclosed, though Pattison said if the sale goes ahead as expected secured creditors, including lender Bank of New Zealand, and all preferential claims will be paid in full and unsecured creditors will also receive a distribution. The liquidators' first report didn't put a figure on the outstanding debt, but did estimate the cost of making 98 staff redundant to be about $5 million.
"We have a long association with Infracon and are pleased to be the successful bidder for these assets, particularly as the largest part of their activities are based in, and their people reside within the wider Manawatu/Hawkes Bay communities, who have supported Higgins over the past 50 years," Higgins chief executive David Geor said in a statement.
Infracon was put into liquidation on Aug. 25 after incurring trading losses of more than $6 million in the three prior years and losing a major contract. Accrued employee obligations meant the business needed $5 million over the next two years to restructure the firm.
The liquidators closed down unprofitable operations, which led to the redundancies, and kept about 113 staff in the remaining parts of the business which continued to trade.
As at June 30, the book value of its property, plant and equipment was $11.9 million and inventories worth $1.4 million. It had about $2.5 million of work in progress at the time of liquidation.
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