Angry subcontractors are trying to retrieve their tools locked in a Wellington Mainzeal construction site.
Mainzeal Property and Construction - one of New Zealand's largest construction companies - went into receivership yesterday.
The company's director Richard Yan said the company could no longer continue trading due to a "series of events that had adversely affected the company's financial position'', combined with a general decline in commercial construction activity and lack of shareholder support.
Today, workers arrived at sites around Wellington to discover their entry was blocked to construction sites, where many tools had been left and they would not be able to retrieve them until receiver PwC had worked out who owned what equipment.
"It's theft,'' Shearer Contracting fire protection worker Mike Bingham said.
He and his workmates had ladders and most of their tools locked at a building site at University of Victoria of Wellington.
Armourguard security officers were guarding the entrances to the sites.
Mr Bingham's boss was at the police station trying to negotiate a way to get the equipment back.
"At the end of the day, they've pretty much destroyed all the small companies by not paying them and now they've locked our bloody tools away,'' he said.
"We've got mortgages to pay and mouths to feed.''
A police spokeswoman said some subcontractors had arrived at the station in an attempt to get their tools back.
"Unfortunately it's entirely a civil thing and we've had to say it's not a police thing until the receivers work out who's property belongs to who, there's nothing we can do.''
One Mainzeal sub-contractor said the firm's demise would have a "significant adverse financial impact'' on its business.
Horizon Energy Distribution Limited's wholly-owned subsidiary, engineering and contracting firm Aquaheat is owed money on a number of contracts with Mainzeal.
Rob Tait, chairman of Horizon Energy, said the impact was currently being assessed by Aquaheat's management but said it was clearly a "serious set-back''.
The receivership announcement came as a "surprise'', Mr Tait said.
Contracts had been proceeding as planned and just two days ago, they had been talking with Mainzeal staff over current and future work "without any hint of trouble.''
Quake homeowners given Mainzeal assurance
Christchurch homeowners waiting for repairs to their earthquake-damaged properties have been assured by insurance companies that their work will not be impacted by Mainzeal's shock receivership.
Some of the company's 400 workers could be shifting into new roles on the post-disaster rebuild with joint venture MWH Mainzeal, bosses say.
Vero and AA Insurance use MWH Mainzeal for residential repairs and rebuilds on quake-hit properties.
Both insurers today moved to reassure customers that their domestic building projects progress will continue as usual.
"This will not affect the overall recovery in Christchurch," a Vero spokeswoman said.
"We will continue to work closely with our customers to ensure their progress is not impacted."
The receivership has put Mainzeal sub-contractors on edge.
More than 1000 sub-contractors could "bear the brunt" of the move, says the Specialist Trade Contractors' Federation.
The group fears the move could result in some small firms going under, or even losing family homes which are often put up as security against loans or overdrafts.
President Graham Burke believes sub-contractors with a large exposure to Mainzeal could fold, and it might be hard to find a new contractor to pick up the work in a burgeoning market like Christchurch where costs are rising.
"It may be almost impossible to find a new sub-contractor that will complete the job at the rates negotiated 18 months to two years ago," he said.
"The effects could be wide-reaching."
Prime Minister John Key didn't believe the 45-year old company's collapse would affect the rebuild in Christchurch where it has about 90 staff.
"They're a really small component part. I'd be amazed if someone didn't come in and buy that part of their business there... or alternatively those workers take up employment elsewhere."
He expected many workers to pick up jobs in Christchurch.
Yesterday, receivers PwC - appointed at the BNZ's request - said Mainzeal's sole director, Richard Yan, had decided the company could no longer continue trading.
This was due to a "series of events that had adversely affected the company's financial position", combined with a general decline in commercial construction activity and lack of shareholder support.
Mainzeal, New Zealand's third biggest construction firm, behind Fletcher and Hawkins, has been working on two of Christchurch's biggest demolition projects - Queen Elizabeth II Park (QEII) and the 17-storey office block Clarendon Tower.