About 210 Infracon workers in Hastings, Waipukurau, Dannevirke, Woodville and Palmerston North were advised today of the impending liquidation of the company.
In a statement, Tararua and Central Hawke's Bay District Councils said they were saddened by the recommendation received from the Directors of Infracon Ltd that the shareholders should place the company into liquidation. The statement said workers "now have uncertain futures while the liquidation proceeds".
Interim Infracon Board Chairman Roly Ellis, Mayor of Tararua, said that a culmination of factors led to this recommendation today to the shareholders. "Infracon has had losses for the previous three years and the cash flow position has meant that the Company cannot continue to trade as it has been."
Advice to the shareholders from the Interim Infracon Board indicated that the long term prospects for Infracon remained extremely difficult and forecasts indicated continuing losses for the next two years.
After receiving a letter from the Bank, withdrawing financial support from Infracon, further negotiations by the interim Board and the Bank were unable to resolve the situation.
The interim Board was in the difficult position of having to decide to make the recommendation to the shareholders to bring in the liquidator after considering all practical options.
In the last two months the interim Board has worked closely with the current management on restructuring the Company - however the situation could not be resolved and the Bank would not maintain support.
The statement said the two councils would work closely with the Liquidator and those staff affected to endeavour to retain the jobs that the business employed locally. Mr Ellis and Central Hawke's Bay Mayor Peter Butler said that both Councils would do everything so that essential services were maintained "during this difficult period".