Tauranga boat builder goes into liquidation owing nearly $7m

Pachoud Motor Yachts' buildings on the Tauranga foreshore. Picture / pachoud.co.nz

Tauranga's biggest boat building company, Pachoud Motor Yachts, has gone into liquidation owing nearly $7 million.

The company, which at one time employed up to 120 people to build luxury yachts, has become the latest victim of the rising New Zealand dollar.

The mortgagee sale sign has gone up on a business hailed as a major new force in Tauranga's boat building industry when it shifted from Rotorua to Tauranga's Sulphur Point five years ago.

It has been a dizzy spiral into insolvency for company managing director Dave Pachoud.

Two years after he bought the 1.8ha site by the Port of Tauranga, Mr Pachoud boldly announced a $3 million plan to build a boat storage stack and dig a canal to service the stack and his boat-building operation.

He even planned to build an apartment block next to the dry stack. But then confidence ebbed out of the industry as the New Zealand dollar climbed above US70c, slashing profit margins for boat builders.

The half-finished skeleton of the boat stack, which has dominated the horizon behind the local sewerage works for more than a year, became a symbol of Pachoud's worsening financial situation.

After shedding most of his production workers in December, Mr Pachoud opted for voluntary liquidation last Monday and closed the doors on the dozen remaining employees.

Attempts to contact Mr Pachoud have been unsuccessful.

Athol Ryan, of RFMS Consulting, the agent for the liquidator, said creditors had commenced High Court proceedings against Pachoud Boat Builders and it eventually became a choice of being forced into liquidation or going voluntarily.

The biggest portion of the $6.9m debt comprises shareholder loans and advances totalling about $2.8m. The preliminary statement of company affairs also shows 10 secured creditors are owed about $2m, 220 unsecured creditors about $1.7m and preferential creditors about $290,000.

The 1.8ha property is shown as being owned by Mr Pachoud and was valued at $5.1 million in September 2003 - comprising land worth $2.2m and buildings $2.9m.

Mr Ryan said New Zealand's rising exchange rate against the US dollar was a big factor and made it tough to compete in the international marketplace.

The final straw was the termination of a large contract in November, with no big job to replace it. From a payroll of more than 100 staff in July, numbers dropped to 65 in December and had reduced to 12 when the doors closed last week.

Mr Ryan said even a few of the creditors had said it was a shame that such a promising enterprise had ended in liquidation.

- NZPA