Richina restructures Mainzeal

Bermuda-registered Richina Pacific has decided on a restructuring package as it deals with major losses on construction projects in this country.

A month ago, Richina Pacific reported a net after-tax profit of US$10.3 million ($17.01 million) for the year to December 31, up 32 per cent on a year earlier.

Despite the profit, the former New Zealand investment company said its subsidiary, Mainzeal Property and Construction, had experienced "significant and unexpected losses" on two major projects in Auckland.

The projects include the Scene One, Two and Three apartment developments in the central business district and 12,200-seat indoor events centre, the Vector Arena, in Quay Park.

RPL chairman John Walker said the company was reinforcing its commitment to remaining active in construction and development here with its Mainzeal interests and also in China, with its significant land and property holdings.

Under the restructuring, which will begin immediately, the construction and development operations of Mainzeal would be merged into RPL's larger Richina Land division.

The RPL corporate operational headquarters would be moved from Singapore to Kuala Lumpur, and some of the roles now in Auckland would be transferred there.

Some redundancies might occur, but the restructuring was expected to have little or no effect on area management or staff.

During the phase of merging and integrating Mainzeal into Richina Land, Richard Yan, RPL's chief executive and managing director, would assume the position of Richina Land chief executive.

For the next two to three years, Yan would be based in Auckland, where his family would relocate by the middle of this year.

The Richina Land division would be responsible for all of RPL's land and property development assets, in China and in New Zealand, including the activities of Mainzeal.

Walker said the Mainzeal operations within New Zealand would be supported even more strongly by the larger organisation.

It was also expected that Mainzeal's capabilities and experience would be increasingly utilised in the ongoing development of RPL's large land and property interests in Shanghai.

Walker said it was intended that Mainzeal would apply for a construction licence in China, to take advantage of opportunities arising from the negotiations between China and New Zealand on a free trade agreement.

On the Kuala Lumpur move, the company said Malaysia had the same common law and Commonwealth country history as New Zealand and Singapore, with the advantage of a significantly lower base in operating costs compared with those countries and even more recently when compared with Shanghai.

- NZPA