The failed Orange H Group construction businesses, once part of New Zealand's second-largest builder Hawkins, owe secured lender McConnell Ltd $23.4 million but it remains uncertain how much of that will be repaid.

Andrew Grenfell, the McGrathNicol receiver and manager of 13 ex-Hawkins companies in receivership as well as liquidation, has produced the third report on the wind-down of the building businesses.

Grenfell, working with fellow receiver Conor McElhinney, is continuing to collect money from building jobs to repay some of that $23.4m owed to McConnell Ltd.

But it appears unlikely that the secured lender will be repaid in full and that the receivers will collect all the $23.4m.


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In March 2017, the McConnell group sold many assets in its Hawkins construction business to ASX-listed Downer EDI for A$55.4m. Employment contracts, the Hawkins brand and name, plant and equipment and selected construction contracts were sold to Downer, Grenfell's report noted.

But some projects remained within McConnell Ltd and didn't go to Downer.

"Construction projects not included in the sale remained with the companies for completion," Grenfell wrote, referring to the retained projects under the Orange H Group structure.

"The majority of the retained projects had reached practical completion and were in their defects liability period."

McConnell Ltd's directors are David Arnot Williamson McConnell of Parnell, John Arnot Williamson McConnell of Remuera and Arthur William Young of Birkenhead. McConnell Ltd is wholly owned by The Shooting Box Ltd whose directors are the same three people but with the addition of Nancy Anne McConnell of Whitford.

In the past six months, the receivers have collected a number of payment claims and retentions on the retained projects and say they continue to work with principals "to seek recovery of amounts due on the retained projects. In some cases, this may require legal actions against principals."

The receivers have paid employees preferential claims in full as well as tax and ACC, the latest report said.

Some Hawkins assets were sold to Downer EDI. Photo / supplied
Some Hawkins assets were sold to Downer EDI. Photo / supplied

Grenfell said the total amount owed to all secured lenders was $173.1m but he discouraged emphasis on that figure, even though it was higher than the $23.4m owed to McConnell Ltd.

"That's the total amount due to secured lenders," he said of the $173.1m.

"But all the companies are related and each of the companies secured each other. So in terms of the lending, all the companies will cancel each other out, meaning that larger amount isn't the significant sum. It's the $23.4m which is owed to McConnell which is the more significant figure," Grenfell said today.

The wind-up or receivership was to complete building jobs around New Zealand which were unfinished when Downer bought some assets owned by Hawkins.

"The family got nothing out of the sale to Downer," Grenfell said today.

"Based on the information that we have, none of the money from the sale of Hawkins has gone to the McConnell family and none of it will. The money has been kept within the business, McConnell Ltd, to wind it down and finish projects," he said.

Orange H Group, which remains part of McConnell Ltd, had a number of legacy and ongoing projects hence the process now going on.

It is those which the receivers are now in charge of and collecting amounts from.

The 13 ex-Hawkins companies in receivership and liquidation are Orange H Group, H Construction Group, Orange H Management, H Plant, Orange H Construction, H Construction South Island, H Construction North Island, H Construction North Island Group, H Construction N.I, H Construction Hobsonville, H Infrastructure Holdings, H Infrastructure (NZ) and HUC.

Last month, the Herald reported how McConnell Ltd, the ultimate shareholding company of H Construction North Island, should pay increased costs to the Ministry of Education after it rejected a settlement offer and attempted to seek an adjournment that wasn't just unsuccessful, but unnecessary.

Last year, the ministry won its case against H Construction North Island, with the court ordering a $13.4m payment to help repair nine leaky buildings at Botany Downs Secondary College in Auckland.

But H Construction North Island Ltd, formerly known as Hawkins Construction North Island Ltd (Hawkins), did not pay, according to the ministry.

A June 26 High Court decision said McConnell Ltd must pay $1.1m.