Construction business Arrow International has gone into voluntary administration after a contractual dispute left it with insufficient cashflow to meet operating costs.
Administrators from accountancy BDO were appointed at 2.30pm today.
"This is not the outcome we wanted or expected, but in light of a recent adjudicator's decision, we had no choice but to take this course of action," the company's board said in a statement.
"We have managed the tough trading conditions which have stressed the entire sector, but this unexpected result has affected solvency to the point that we could not sustain trading as we have been."
Arrow International was founded by Ron Anderson and Bob Foster in Dunedin in 1984.
"In recent times, the construction industry has become challenging and there is a disproportionate level of risk carried by contractors," they said, adding that they wanted to work with administrators to stabilise the business.
"Importantly, most of our large projects have been completed or are near completion and wherever possible the project teams will be retained to successfully complete the works."
Last week Foster told the NZ Herald the business had an issue with one Auckland job but was resolving that and altering its business model.
"We're trying to wind down the amount of tender work we do and doing more negotiated work," Foster said on Friday.
Arrow, one of this country's larger builders with a national spread, works on retail, commercial, Government, tourism, education, retirement sports and recreation and residential work.
Foster acknowledged problems with an Auckland project Arrow had worked on but refused to name it or the client or say what had gone wrong.
"You naturally do get the odd bad job but I think that information is confidential to the company and you just deal with it. You sort it out with the clients. We've got one job with a few concerns in Auckland and we're hoping to get that sorted out with the clients in the next weeks," he said.
Foster and co-founder Ron Anderson both appeared on the National Business Review Rich List, estimated to each have assets valued at about $130m and said work included a new 488-room student accommodation complex in Auckland and a 20-level Wellington apartment block.
Foster was reported to have interests in Wanaka's Aspiring Lifestyle Retirement Village and the Mt Eden Gardens village in Auckland.
Sub-contractors were seen removing tools from a Wellington building site today.
Arrow had about 450 staff and annual revenues of more than $350m.
Nick Hamlin, Arrow's southern general manager, said today the business had been "downsizing" for the last year in his region.
He had worked for Arrow for 19 years but said he left in the last week by mutual agreement. The Queenstown-based boss said the firm had bid and won jobs which some other firms refused to take on.
"The southern area was running well and there were about 15 staff," he said, telling how Arrow subcontracted work out to other firms. Construction of facilities for tourism, events, leisure and adventure were the firm's speciality in Queenstown, he said.
The iFly indoor skydiving building was one example in the sports and recreation field, he said. An 8m deep basement and wind turbines sit on top of the building. The turbines blow air around the building, into the basement and then project it up through the centre to create a flight chamber so clients can float on a column of air rising 5m.
Hamlin said he was drawn to work at Arrow "due to the culture at the time" he joined. But the business had changed.
"They scaled down some of the operations in the lower South Island," he said.