KEY POINTS:
The tide is in at Henderson Creek in West Auckland, but glamour boatbuilder Sensation Yachts, based in a sprawling and run-down 2ha boatyard on the riverbank, appears to be high and dry.
The wall panels of the vast factory buildings are rusting and holed. Weeds sprout everywhere, even in the guttering above Sensation owner Ivan Erceg's office. The huge boatyard, once humming with more than 400 staff, is virtually deserted. Just five staff keep the administration ticking over.
The receptionist says she has not seen Erceg "for some time. We keep in touch via email."
The boatyard site is the subject of a mortgagee sale demanded by HSBC bank. The deadline for tenders ran out on Wednesday but a Bayleys real estate agent said it had not been sold.
But Erceg, brother of the late alco-pop baron Michael Erceg who was killed in a helicopter crash in 2005, has assured the Herald on Sunday he is going nowhere.
Yes, times are tough, yes he's had to put the place on ice for three months, but he has a "clearly defined plan" to weather the recession which is battering the industry, and has vowed to resurrect the Henderson boatyard to its former glory.
"My brother would have said 'shut it down and take your loss'. But I'm not a quitter. I'm not doing a runner."
Erceg says future work has already been secured, including a contract for a 100m, $400 million motor yacht, the biggest built in New Zealand. It will be constructed partly in Henderson and partly in Whangarei.
Sensation has been a troubled place for several years, with countless attempts to wind up the company over unpaid bills. Erceg has repeatedly fended off liquidation at the 11th hour, finding cash to pay off creditors.
The latest case involved the company's former lawyer Garry Pollak, who filed an application with the Auckland High Court to liquidate Sensation over a bill of $10,000 plus costs.
"It's a step we have taken very reluctantly," said Pollak. "It's a bit embarrassing for everyone, especially him." He said it was a "complete mystery" why Erceg had failed to pay the modest bill.
"He has been aware of it for many, many months. I haven't seen or heard from him in over a year."
But, in a dramatic court room scene on Friday, a cheque from Erceg settling the debt was presented just moments before the judge was to put Sensation into liquidation. It was a typical piece of Erceg brinkmanship.
Erceg says the rash of liquidation attempts resulted from "bad book-keeping" by Sensation's previous management team, who took over the reins when he temporarily stepped down from day to day running of the company more than two years ago.
He says the Pollak bill "fell through the cracks".
So when will the late bill paying cease? "It's coming to an end. There are a couple of other ones, a couple of thousand dollars here and there. Look, last year I injected $13 million to keep this company running. Why would I let it fall for $10,000?"
Erceg has also been involved in a court battle with two wealthy Russian investors over a failed contract for five luxury super yachts.
The parties agreed that the company, Balenia, would sell three of the vessels to Erceg for US$21.5 million ($41.2 million).
In September the High Court ordered Erceg to pay up, but he went to the Court of Appeal earlier this year. Judgment in the case has been reserved. Erceg says he is "comfortable" with any outcome.
He maintains that Sensation has to change direction to cope with the recession, which he believes could last for two to four years. He says he has already started an expensive facelift for the boatyard which in future will employ sub-contractors to build superyachts. His dream of creating a roboticised boatbuilding operation in Singapore is still on-track but is being scaled back from its half-a-billion-dollar development.
He hopes that the staff he laid off in West Auckland can be re-employed and says that he is keeping in touch with them.
He calls the mortgagee sale of the boatyard site a "red herring" and says he is still in negotiations with HSBC. Erceg appears to have an answer for everything.
Asked how he has been able to keep going without much income, he acknowledges he has had "family support". His brother's business sold for nearly $900 million. Erceg laughs at rumours he owns a $50 million house in Monaco, but admits the family owns "a lot of property globally".
Erceg says the value of luxury yachts has been slashed by up to 50 per cent.
But he is not the only boatbuilder facing waves whipped up by the recession. This year giant Italian yacht builder Ferretti defaulted on its debt repayment, amid reports that a drop in new orders, an increase in cancellations and a slowdown in payments had led to cash flow problems.
At least three local boat builders went into liquidation last year and an application to wind up another will go to court next week.
Peter Busfield, executive director of the New Zealand Marine Industry Association, agreed the sector was suffering "like every other industry".
"But there's also optimism. More than 70 per cent of the market is still there. We have 500 member companies. You can count on one hand the number that have fallen over, although quite a few are struggling."
