Aussie creditors clamouring for cash force NZ business into administration

City Rail Link: RCR is working on the project. Photo/Michael Craig

Australians, clamouring for cash from the New Zealand arm of a troubled engineering and infrastructure business headquartered across the Tasman, have resulted in voluntary administrators being appointed here.

New Zealand's RCR Energy, RCR Building Products and RCR Infrastructure are now under the control of Auckland-based administrators Conor McElhinney and Andrew Grenfell of McGrathNicol but they said they are operating under a "business as usual" scenario.

A statement spelt out the background.

"The directors have advised that the New Zealand businesses are currently in a cash-positive position and have continued to trade in a self-sufficient and cash-flow-positive manner since the ASX-listed parent, RCR Tomlinson went into voluntary administration on November 21," the McGrathNicol statement said.

"However, the New Zealand businesses, as guarantors for certain liabilities of the Australian businesses, have received demands from Australian creditors seeking recovery from guarantors they believe may be in a cash position to pay. With this exposure over the New Zealand businesses, the Directors, after taking legal advice, formed the view that the appointment of administrators was appropriate in the circumstances," the statement said.

RCR is one of the businesses working in a joint tender on a project for Auckland's $3.4b City Rail Link.

In late November, the Herald reported how RCR in New Zealand remained working on this country's largest infrastructure project, then unaffected by woes across the Tasman.

Sean Sweeney, City Rail Link chief executive, said at the time that the local arm was in a joint venture to deliver a $50m contract as part of the train tunnel project and nothing had changed.

Companies Office records showed RCR Infrastructure (New Zealand) was not then in voluntary administration despite its parent RCR Tomlinson in Australian suffering that fate.

But now that situation has changed.

The administrators said they were operating RCR under a "business as usual" scenario. They would work with the Australian administrators of RCR to assist in the sale process, which would include the New Zealand business, the McGrathNicol statement said.