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A cash-flow crisis has forced Auckland car auction company Hammer Auctions to restructure its business.
Managing director John Boswell said he had been in talks with potential liquidators over the past couple of weeks but had put together a plan which he hoped would enable the company to trade out of its problems.
The cash-flow issues have meant some vehicle suppliers have not been paid despite their cars being sold.
Boswell said the company would be doing all it could to pay back its creditors as soon as possible and had set up a trust account to ensure that money from future car sales would go to the vendor.
Boswell said the company would be undertaking a review of its business practices to identify problem areas.
It was also looking at ways to reduce its overheads - in particular the high rent on its Onehunga site.
He said the company would also look at storing cars on site at dealers' yards rather than bringing them to the auction centre.
Boswell said the firm's financial woes had been triggered by difficult trading conditions in the second-hand car industry compounded by tighter lending conditions due to the high number of finance industry failures in the past couple of months.
He said car sales had dropped 20 per cent compared with this time last year. Hammer sells around 60 to 100 cars per week.
Boswell, who is the sole director, said he was hoping to sign a deal with an international company to boost cash-flow.
