By ADAM GIFFORD IT writer
Unsecured creditors of failed state-owned enterprise Terralink could get up to 38 cents for every dollar they are owed, depending on how much IT services giant Electronic Data Systems claims.
In a report filed with the Companies Office, receivers Gary Traveller and Richard Agnew of PricewaterhouseCoopers say EDS is claiming $10 million for alleged contract breaches, and other unsecured creditors are seeking $3 million.
The report reveals the price paid for Terralink by a consortium of New Zealand Aerial Mapping, Animation Research and software expert Mike Bundock was $7.2 million plus GST - around $300,000 less than a rival bid.
With that money and other debts called in, the receivers have paid running costs, secured creditors and a $1.5 million debenture held by the Minister of Finance, leaving them with $3.7 million on hand and $1.35 million still to come in.
The receivers were called in after Terralink started falling behind in a subcontract it had with EDS to convert survey plans into digital format for Land Information New Zealand's $145 million Landonline project.
When the Government started penalising EDS for not meeting its targets, EDS passed the debt on to Terralink.
Payments during the receivership included $3.7 million in wages and holiday pay and $1.8 million to Inland Revenue. Receivers' and solicitors' costs chewed up another $1 million.
Mr Traveller said that was reasonable, because of the complexity of the task.
EDS managing director Robert Gray said EDS was still working out its losses, which included direct costs as well as penalties for contract performance.
Mr Gray said EDS had relied on Terralink for survey expertise in terms of the Landonline application and also to capture the survey plans.
"It underestimated the work required. At the point it was put in receivership, it was six months months behind," Mr Gray said.
"We've stepped up to the mark. We still have a contract with LINZ to provide these, so we've bought some skills, employed people and carried on positively."
But the time lost, including the three months during the receivership when no work could be done, means EDS is still paying penalties to the Government.
"I can't see any upside [to the contract], just downside. It's not possible to catch up," Mr Gray said.
New Zealand Aerial Mapping managing director Craig Atchison said the price paid for Terralink was fair.
"It was not a great bargain. We bought good building bricks to build a great firm," Mr Atchison said.
"It needed commercial nursing, being a Government department, but between Animation Research and us we can create a viable New Zealand business. What it has done is give us technical skills in certain areas we did not have, and it also gives us great exposure for offshore work. We are now a more integrated seller of data and mapping processes."
Liquidator Iain Shephard, of Howard Shephard in Paraparaumu Beach, said he would circulate forms for unsecured creditors to provide proofs of debt this week.
Formally calling for proofs of debt invokes a strict timetable, so he would not take that step until he had negotiated with creditors.
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