KEY POINTS:
A boat builder specialising in multi-million-dollar superyachts for wealthy clients could be scuppered by a former director who has applied to have the company liquidated.
Auckland's Sensation Yachts, owned by Ivan Erceg, brother of liquor baron Michael Erceg who died in a helicopter crash in 2005, is facing
at least two liquidation threats, one from former director and chief executive Paul Sills.
Sills believed the company was failing despite a "large amount of support" from Erceg's brother's estate. "There's been a failure to capitalise properly and a failure to secure good commercial contracts."
The Henderson-based company, which also has a shipyard in Australia, has been building superyachts for 30 years. Its latest luxury motoryacht, the $60 million, 50m MY Sensation, was launched last year.
It was a star attraction at this year's Dubai International Boat Show and was to be the focal point of events in Singapore marking the company's expansion into Asia.
But Sills, who left the company in March, has cast doubt on all of that. He claimed Sensation owed creditors up to $3 million, had run out of contracts and had unfinished boats in its West Auckland yard worth up to $75m. He said he was owed $89,000 in expenses and intended to go to the Employment Relations Authority with a claim for a "significant amount" of unpaid salary.
Sills said despite a boom in the luxury yacht business, Sensation had run out of contracts, mainly because it had developed a poor reputation for customer service.
"It should be a time when Sensation and everyone should have orders coming out of their ears. When you don't have cash flow, you don't have cash flow. I'd be running around all week looking for money for wages. I put $400,000 of my own money into the company."
Erceg could not be reached for comment yesterday. A woman at his Hobsonville home said he was "at his office" in Auckland, but nobody answered phones at Sensation Yachts.
Sills said he did not believe the company could survive.
"I feel sorry for the staff, week by week not knowing whether they will be paid or not. But I'm indifferent about what happens to the business."
The Herald on Sunday understands Sensation's operation in Newcastle, New South Wales, is struggling to stay afloat, with several redundancies last month.
Two weeks ago the com-pany went to the High Court seeking an injunc-tion against Sills' application for liquidation. Justice Geoffrey Venning dismissed the bid, saying there was "a real concern over the solvency of the applicant company".
"There are major issues as to cash flow but even taking that into account the company has not been able to pay its debts for some time," said Venning.
He also pointed out that creditors had issued 17 statutory demands against Sensation since October 2007, including one from the IRD for $839,000.
The second application to liquidate, filed by MacArthur Marine, will be heard on June 13.
ILLUSTRIOUS LINE-UP
Sensation Yachts started building boats in the 1970s, expanding its business as the worldwide demand for superyachts increased.
The West Auckland boatyard has produced 29 yachts in the past 30 years, including:
MY Sensation (2007): 50m, able to accommodate 10 guests in five staterooms, grand piano on board.
Maratani X (2004): 46m, features granite floors, gold-plated internal lift and jacuzzi.
Noble House (2003): 50m, features marble bathroom with double jacuzzi, wine cellar, movie-viewing area with seating for 14. Available for charter at US$230,000 ($297,000) a week.
MY Aria (2000): 47m, gold fittings, onyx marble bathroom.
