Auckland company Precision Foundry in receivership, 80 jobs on the line

The company annually pours several thousand tonnes of high-quality iron castings. Photo/Getty Images.

Auckland-based iron casting company Precision Foundry has been placed in receivership affecting up to 80 staff.

Precision Foundry, formerly Masport Foundries, was taken over in October 2014 by private equity firm Challenge Partners.

Receivers Grant Graham and Pravin Bhana of KordaMentha were appointed this morning, Challenge Partners director Paul Ayers confirmed in a text message to the Herald.
The company is the country's leading manufacturer of cast ductile and alloy iron, from its Mt Wellington plant.

The company, which now operates under the MFL name, pours several thousand tonnes annually of high-quality iron castings, most of which are then machined and/or coated prior to final dispatch. These are exported globally and MFL products can be found in many areas of Australasian equipment manufacture.

Ayers said the company was challenged by the high New Zealand dollar, and a plant failure that reduced production for 10 months.

Tight margins meant the company was unable to reinvest in the ageing plant, he said.

"MFL has exhausted its financial reserves.

"We have absolutely tried our hardest but ran out of options to get through."

Challenge Partners was set up in 2012 by Ayers, a former British Navy Officer, and Myles Cooper. The fund targets "tired" industrial businesses with potential and investors buy a "seat" requiring a loan of $650,000 for 10 years.

Other businesses in the portfolio include agriculture cultivation equipment manufacturer Fieldmaster, plastics engineering firm LEP and Shuk Engineering.

Foundry staff blindsided

The Etu union says its members were blindsided by the receivership.

Coordinator Ron Angel says MFL workers were sent on leave for the Christmas break without being told about the receivership, which was unacceptable.

"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, to let them know what is happening, and to ensure they know their rights and entitlements."

The union is also seeking an urgent meeting with the receiver.

"This is a pretty sad end to a company which has traded for about 100 years," Angel said.

"It's another example of a company which has been down-sizing over time and now it looks like the end has come. That is always very hard news for those involved and especially just before Christmas."

Ayers referred all further comment to the receivers.