Retired founder of collapsed construction firm 'sorry that it's all happened'

Wednesday, 1 August 2018

Workers turned up to a new Ebert Construction site in August to find they were locked out.

The founder of construction firm Ebert Construction says the company's collapse is sad for the family name.

The large construction company was put into receivership on Wednesday morning with receivers saying the company owed 'tens of millions' of dollars, largely resulting from poorly performing projects in Auckland.

Workers and contractors arrived at Ebert Construction sites around the country this morning to find themselves locked out with no access to their tools.

Retired founder of Ebert Construction Dennis Ebert says the company's receivership is 'unfortunate'.

Ebert founder Dennis Ebert said he was sorry to see the company in receivership.

* Precast firm gets settled in before rebuild

* India planning $30 million 'house to call our home' in Wellington**

'It's really sad for the family name to be attached to that,' Ebert said.

'It's just one of these unfortunate things.'

He said he retired in 2011 and had not had any association with the company since then.

'I'm sorry that it's all happened. I can't do a thing. It's just my name there that's all.'

Company records show Ebert retired as a director in 2015 and ceased being a shareholder in 2004.

Beatrice Ebert, who lives at the same Belmont address as Dennis Ebert, is still a shareholder.

Ebert said he formed the original company in the 1970s.

Ebert Construction workers were reportedly given a letter from receivers confirming the receivership.

PwC confirmed its appointment as receivers to Ebert Construction.

Ebert Construction has gone into receivership. The company specialises in commercial and industrial work and has major projects on the go in Auckland and Wellington. Workers and contractors have been locked out of building sites on Wednesday mornin

Receiver John Fisk said the company owed about $40 million.

PwC was appointed after the company's board made a request to its bank, the receiver said. It has set up a website for the receivership.

Ebert was currently working on 15 projects, including the Indian High Commission's new headquarters in Wellington, the Union Green apartment development in Auckland, a unit at Middlemore Hospital and a new commercial building for Premier in Carterton.

Ebert also had two dairy projects in the pipeline for milk processor Synlait, a powder manufacutring site in Pokeno and Synlait Dunsandel, a liquid dairy packaging facility with both expected to be complete in 2020.

Synlait said in a stockmarket announcement that both projects were 'turn key' and it had full confidence in its relationship with Tetra Pak.

Farhad Moinfar, director of Myland Partners which is developing Union Green, said the news had come as a surprise and the company's main aim was to see the completion of the project.

'We are taking advice and working through the implications as to what it means for the Union Green project,' Moinfar said.

The abandoned Ebert Construction site for the Union Green apartment development in central Auckland.

The high-end Union Green apartments once complete would consist of 155 one, two and three bedroom units with underground car parking.

A 12 storey tower and three blocks of four level terrace houses were planned.

Fisk would not say which Auckland projects were under-performing, but said Ebert's directors had acted quickly after receiving new information last week.

The $30m Indian High Commission which was being built by Ebert Construction when the firm went into liquidation this week.

About 95 staff would be called to staff meetings in Ebert's locations on Wednesday to explain what had happened and co-ordinate the picking up of tools and equipment.

Workers had been paid up to July 31 and would be paid for every day they were available afterwards, but work would stop to give the receivers time to formulate a plan, Fisk said.

'We'll contact the principals or the developers that Ebert is working for and try and get some clarity on where each of those contracts will go, in terms of whether Ebert can finish the work or whether the site's handed over to someone else, or whatever other options there are to complete the sites.'

Workers arrived at the Union Street site this morning to find they had been locked out.

A statement from PWC said it had been advised by Ebert's that it had a number of poorly performing projects in the Auckland region which adversely affected the company's financial position.

'Last week, the board was advised of likely substantial increases in the expected costs to complete those poorly performing projects.

'Alongside those poorly performing contracts, the company's portfolio of projects includes several well performing contracts.

Workers waiting for updates from their bosses, after they were locked out of the Union Green development.

'Notwithstanding this, the directors formed the view that the company could no longer continue trading given the impact of the actual and anticipated losses.'

Fisk said it was 'committed to doing the best we can for the staff, subcontractors and suppliers of Ebert'.

'We will work closely with all parties involved with the contracts in progress to determine the best way forward.'

PwC partner John Fisk said last week Ebert's board was advised of substantial increases in expected costs to complete poorly performing projects.

There were about 20 employees locked out of the company's Union St offices in Auckland on Wednesday.

One worker said he had another job lined up but could not go without getting his tools.

Tower Cranes NZ founder Julian Oxborough said his crane was on the Union St construction site.

Oxborough said he had three jobs with Ebert Construction and had just put up a crane in Pokeno.

An Ebert contractor said he first heard about the receivership at 7am and was at the site, trying to get his workers' tools.

Workers were unable to get to their tools.

Calls to the company's Wellington phone number this morning were disconnected.

A staff member at its Auckland office said the company 'was not taking calls' and the construction firm's Facebook page appears to have been taken down.

Ebert has completed numerous projects throughout New Zealand including dairy and meat processing plants, commercial sites for retailers like Bunnings Warehouse and residential projects.

Ebert Construction was founded by managing director Kelvin Hale and the company's namesake, Dennis Ebert.

It was incorporated in 1999 and among its shareholders are Bronwyn Hale and Beatrice Ebert.

Warwick Quinn, chief executive of the Building and Construction Industry Training Organisation, said that ironically, building booms were some of the riskiest times for construction companies.

'One, they get caught with fixed price contracting, which is often standard business practices, but then they get delays in getting the work started or consented, then prices increase during that period beyond their control…so when they've got a fixed price contract, potentially with liquidator damages at the other end, and they're stretched, they get caught.

'And so from that perspective, making sure that you've got the ability to increase your prices for escalation beyond your control is really important.'

'It's not uncommon during a boom that these things happen.'

Quinn, a former head of the Registered Master Builders Association, said the 'only silver lining' of such collapses during a boom was that workers stood a better chance of finding jobs with other companies.

'Notwithstanding that you'll have a whole lot of subcontractors and suppliers that are potentially exposed for non-payment of their costs.'

Master Builders chief executive David Kelly said although Ebert's receivership came as a surprise, there had been growing concerns of the industry facing greater challenges in recent years.

'It's bad news for everyone, the employees, subcontractors and clients. Everyone loses out.'

Kelly said some of the 'worrying trends' in the industry were a combination of contractors taking on risk they did not fully understand and also a shortage of subcontractors in a 'booming' industry.

'There used to be a lot of transparency in terms of contracts. But now we're seeing lengthy special conditions in contracts. These contractors are taking on liabilities they don't fully understand. For instance if a contractor falls over they're not covered at all.

'In a booming economy it's hard to get subcontractors and if you take on too much work that can have a knock on effect and snowball very quickly. Take on risk, but price it. If you don't price your risks correctly, then that's foolish.'