Hastie Group folds - 500 NZ jobs at risk

Engineering company Hastie Group, which has gone into voluntary administration, was one of the big contractors for redeveloping Auckland Hospital. File photo / Dean Purcell

Thousands of jobs, including 500 in New Zealand are at risk after Australian engineering firm Hastie Group went into voluntary administration today because of its mounting financial woes.

The company was in talks with banks and new investors last week but that broke down when Hastie discovered an employee had been falsifying the company's accounts.

It has operations in Australia, New Zealand, the United Kingdom, Ireland and the Middle East, and employs about 7,000 people.

In a statement released today, the company said Hastie Group and its 44 Australian subsidiary companies had appointed voluntary administrators.

The administrator, from corporate restructure firm PPB Advisory, will work to recover as much value as possible from Hastie for stakeholders, such as its banking partners.

Hastie provides services to the construction industry including electrical, plumbing and refrigeration.

It has operations in all Australian states except Tasmania and in New Zealand.

Hastie New Zealand' s website says it has more than 500 employees. It was founded in 2001 after being awarded the contract to provide mechanical services installation at Auckland Hospital, "one of the largest mechanical services projects in New Zealand's history."

It operates throughout NZ with major contracts in Auckland, Tauranga, Palmerston North, Wellington and Christchurch, as well as service branches in other parts of the country.

Other New Zealand based Hastie Group businesses include Aquaheat Industries, Professional Building Services, Medical Gas services, Cowley Refrigeration, Gordon Refrigeration and Project Piping Ltd.

Other big projects the company has been involved in include the Auckland War Memorial Museum, Sky City Convention Centre and Grand Hotel, the Stamford Plaza Hotel in Auckland, the redevelopment of Tauranga Hospital and the Univerisity of Auckland Business School.

Hastie in Australia announced earlier in this month that its first half earnings would be reduced to zero, following two write-downs in November and a $150 million loss for the six months to December 31.

Hastie's investigations into irregularities in its accounts, which date back to the 2008/2009 financial year, are expected to amount to a $20 million charge to its profit for the current financial year.

"It could not have come at a worse time for us," chief executive Bill Wild said on Friday.

"We've been trying to negotiate a deal with the banks and our new investors and they're very unhappy."

The employee who admitted to altering figures had been suspended, and a second employee involved was expected to be disciplined, the company said.

Some current and former senior management are also believed to have participated in the irregularities.

The issue has been referred to the Australian Securities and Investment Commission (ASIC).

-WITH HERALD ONLINE