The administrator of the failed Wynyard Group, Korda Mentha partner Grant Graham, has dismissed 72 of the company’s 132 staff saying the company’s cashflow is unable to sustain it current workforce.
Nineteen jobs have gone in Auckland, two in Wellington, 41 in Christchurch and 10 in Dubai.
Wynyard Group’s directors placed the company into voluntary administration on 26 October after deciding against taking on a previously arranged $10m loan from one of the company’s major shareholders or raising new capital.
When it announced the move the board said it believed the decision would enable all options for retaining the value in the business to be fully explored. However, the administrators’ announcement suggests those options are very limited, and that the assets will be disposed off in a fire sale.
Graham said KordaMentha had worked through Wynyard New Zealand’s operating prospects and its continuing cash burn and the lack of profitability limited his options for the organisation.
“We have received interest for a number of the group’s assets but given the cash deficiencies we face, we will be unable to maintain the ongoing cost of the staff structure, while we explore the sale prospects,” Graham said. “Unfortunately, as administrators, we cannot justify incurring continuing costs without confidence in a successful outcome,”
He said the priority now was “to reduce the cost base and work with parties to realise value for Wynyard Group’s intellectual property embedded in the various products.”
KordaMentha will hold the first creditors meeting on 4 November.