Precision Foundry, formerly Masport Foundries, was taken over in October 2014 by private equity firm Challenge Partners.
Challenge Partners director Paul Ayers said in a text message to the Herald that Precision Foundry had reached a tipping point when its second largest customer cancelled an order and its landlord required expenditure to be made on the building.
"While we are very disappointed that Precision Foundry has gone into receivership, we are pleased that Pacific Foundry was able to pay three weeks holiday pay to its staff before the receivers were appointed," he said.
Ayers said that two plant closures last year meant that the company was only producing at 60 per cent of its usual production.
"Faced with this, some customers demanded security of alternative supply and arrangements were made to support those customers by having those alternative manufacturers available," he said.
Without the alternative manufacturers, Precision Foundry would have been in a worse financial position, he said.
The receivers said they were working with management to consider the company's options and that the would write to staff to confirm their individual entitlements.
E tū says the union and its members have been blind-sided by the receivership.
A manager yesterday notified the union of the receivership by phone, but so far there is no official confirmation, says Ron Angel, E tū industry coordinator.
The firm's workers had been sent on leave for the Christmas break without being told about the receivership.
"We are deeply appalled that the employer has done this, knowing full well this was coming and that their workers didn't know. Nor did the union," Angel said.
"This is a pretty sad end to a company which has traded for about 100 years," Angel said.
The company is the country's leading manufacturer of cast ductile and alloy iron, from its Mt Wellington plant.
It now operates under the MFL name, pours several thousand tonnes annually of high-quality iron castings, most of which are then machined and/or coated prior to final dispatch.
These are exported globally and MFL products can be found in many areas of Australasian equipment manufacture.
Ayers said the company was also challenged by the high New Zealand dollar.
Tight margins also meant the company was unable to reinvest in the ageing plant, he said.
"MFL has exhausted its financial reserves.
"We have absolutely tried our hardest but ran out of options to get through."
Challenge Partners was set up in 2012 by Ayers, a former British Navy Officer, and Myles Cooper.
The fund targets "tired" industrial businesses with potential and investors buy a "seat" requiring a loan of $650,000 for 10 years.
Other businesses in the portfolio include agriculture cultivation equipment manufacturer Fieldmaster, plastics engineering firm LEP and Shuk Engineering.
