Excell shrugs off Hartner's fall as it awaits $30m boost

By DANIEL RIORDAN

Excell Corporation's half-owner Eric Watson is playing down the collapse of the company's other shareholder, Hartner Construction, maintaining its failure will have no impact on Excell's operations.

And he says a cash injection for Excell of close to $30 million from an Australian investor remains on track.

Hartner, the country's fourth-largest builder, went into receivership last Thursday.

"The receivership doesn't affect Excell's day to day business operations or its financing.

"The company has its own board and management team and it's business as usual," said Mr Watson.

He said he was talking to Hartner's representatives about its shareholding but had made no decision on whether to increase his investment.

"We're comfortable where we are for now."

Mr Watson and Hartner bought Excell for $25 million from the Manukau City Council two years ago.

The company does roading and sewerage work and looks after parks, buildings and sports venues.

On the pending cash injection, Excell chief executive Earl Stevens said the company hoped to bring on board a "large Australian fund" as a substantial shareholder by the end of this month.

"It's with our lawyers now. Documents have been exchanged."

The move is unrelated to the receivership.

Excell has been planning since the middle of last year to raise $30 million to finance its expansion, and had put out an information memorandum seeking that amount.

Mr Stevens said then that an extra $30 million would allow the company to boost its revenue by $80 million to $100 million.

Excell had turnover of $180 million in the year to September, with Australian work accounting for about $70 million.

It is forecasting turnover this year of $220 million, not counting growth opportunities made possible by the pending cash injection.

Mr Stevens said none of Hartner's liabilities was secured against Excell's assets.

Hartner Construction principal Wayne Hartner owns his 50 per cent through a joint venture, Vonelle Holdings.

The Excell shareholding is likely to be one of the assets on Hartner's books the receiver, John Waller, would look at, said Mr Stevens.

But he said there were no other financial links between the two companies.

"Some people might think we're in the same sort of game but we're not.

"We have got the long term maintenance contracts, three to five years, and we are dealing with councils and people who have actually got money and not developers.

"There might be a bit of crossover in some of the suppliers and we might experience a little bit of nervousness there but we don't see it as too much of an issue."

Links:

www.excellcorp.co.nz