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Sensation is Top of the News in NZ tonight

Discussion in 'Sensation Yacht' started by K1W1, Sep 5, 2008.

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  1. K1W1

    K1W1 Senior Member

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    Hi,

    I understand that Sensation Yachts has been top of the TV News tonight as it has folded with massive debts- The reasons given on the Telly are not the same ones I have heard coming out of the industry for a year or so now since the demise of the Owners Brother who used to prop them up financially.
  2. Hawk

    Hawk Senior Member

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    As post on TVNZ

    Failed yacht deal costs company
    Sep 5, 2008 6:59 PM

    A boatyard held up as a shining light of Kiwi innovation is now facing a multi-million dollar demand for money.
    Auckland-based Sensation Yachts has been ordered to pay two wealthy Russian investors more than $32 million over a failed superyacht deal.
    Sensation Yachts has been fighting a long list of creditors on both sides of the Tasman for the past 12 months and recently gave up its Australia base in Newcastle.
    The $90 million deal with the Cheshinsky's was signed up three years ago for five boats and they paid $25 million in deposits.
    But no boats were ever completed.
    The problems in Auckland are similar to those at Sensation's Australian boatyard in Newcastle.
    "They can't afford to pay the rent, they've run out of workers compensation insurance and there's no work for those left to go on with," says Steve Murphy, Australian union organiser.
    Sensation opened for business in Australia two years ago, supported by a five year government tax rebate.
    The boatyard promised 400 jobs, but unions say only 35 workers were ever signed up and they were left in the lurch when the yard shut a few months back.
    Trent Schumi, a former Sensation Yachts apprentice, is still looking for a new job.
    "Hopefully I can find another job like that otherwise my trade is going down the gurgler," says Schumi.
    A handful of Australian creditors owed more than $400,000 are still trying to put the business into liquidation. And the same has been happening in New Zealand.
    At least 17 creditors have filed statutory demands against the company including Inland Revenue and ACC, but each time, Sensation pays up at the last minute.
    Erceg has always played down the many legal disputes and claims against him calling them minor in nature.
    "Some have been resolved, others are very days away from being resolved," says Erceg.
    But whether Erceg can find $32 million for the failed Russian contract remains to be seen.
    He has been fighting workers, unions, clients and creditors for the past eight years.
    He has already sold his $17 million Hobsonville mansion and he has also benefited to the tune of millions from the will of his late brother Michael who was killed in a helicopter crash three years ago.
    Sensation Yachts has also been given a six million dollar cash injection recently to get itself over the current financial crisis, but its still hard to say if the boatyard will continue to survive.
  3. YachtForums

    YachtForums Administrator

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  4. K1W1

    K1W1 Senior Member

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    Hi,

    I guess Lars won't have to worry about that one from them anymore.

    A weird thing is that as yet, other than TVNZ there is no online news reporting of the situation from the main web editions of the NZ Based papers. (stuff.co.nz and nzherald.co.nz)
  5. K1W1

    K1W1 Senior Member

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  6. Fishtigua

    Fishtigua Senior Member

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    Sorry but it's going to be tough all over, whether you are a bigboy yard or a newbie. If hard ready cash is available projects should get the green light, other than that, God help you.
  7. Jorge Lang

    Jorge Lang Senior Member

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    I was at Sensation three years ago and was impressed with how they were building. The entire engine room was being built as a module. When completed, it was to be placed in the hull. There were big plans to build in Australia and I think Singapore.
  8. K1W1

    K1W1 Senior Member

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    Hi,

    Yes Jorge these big plans were being projected with the use of smoke, mirrors and the unauthorised use of others designs.

    Here is the latest update from NZ.

    http://www.stuff.co.nz/4835725a13.html
  9. Jorge Lang

    Jorge Lang Senior Member

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    So the Russians want their 21 million and there are three uncompleted boats. I think if 21 million was still around at Sensation, they wouldn'y be in this situation. Any predictions as to how this will end?
  10. Kevin

    Kevin YF Moderator

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    Badly?
  11. K1W1

    K1W1 Senior Member

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    Hi,

    Interesting to see Ercegs defence against the Russians claim was that they didn't demonstrate clear title to the yachts.

    Seems strange that there should be any doubt from the Builders point of view how much money was paid and how much they had previously agreed to pay.

    It is unfortunately a bad apple like Mr Erceg has shown to be repeatedly that gives a small operations like yacht construction is in NZ a very bad name.

    All you read about in these articles is his legal wrangles, there is no mention of the number of workers and their families who will and have been affected by his cavalier attitude to business.

    There is another guy who may or may not read things at YF who got stiffed over this deal really early on so some might just say "Bad Karma" Ivan.:)
  12. K1W1

    K1W1 Senior Member

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  13. brian eiland

    brian eiland Senior Member

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    More Hard Times, Sensation owner has yacht impounded

    By IBI Magazine
    (18 May 2009)

    Creditors have followed Sensation Yachts owner Ivan Erceg to his home in France and have impounded his 50m (164ft) superyacht, Sensation, at a harbour in Marseille. Writs were attached to the yacht earlier this month, according to New Zealand press reports, preventing it from leaving the port. The yacht was built at Sensation Yachts' Henderson yard in New Zealand and launched in 2007.

    Erceg told the Sunday Star Times that the yacht was commissioned by his later brother, Michael Erceg. After Michael Erceg's death in 2005, Erceg said he was compelled to complete it with his own resources.

    Erceg said he is now trying to sell the yacht and his mansion on the Cote d'Azur, both of which are owned by his family trust. The yacht has an asking price of NZ$60m and the mansion was listed for sale at NZ$108m. Erceg said the sales would give him more than enough capital to rejuvenate his boatbuilding business. "At the moment my asset base is extreme but my liquidity is low. My personal debt to equity ratios are still very favourable so there's no issues on that," he told the paper.

    Last month, Erceg lost an appeal involving three superyachts worth US$21.5m. Erceg had appealed a case that had been initiated by a company called Balenia, which had commissioned the three yachts in 2004. When the relationship broke down in 2007, Erceg agreed to buy the three partially completed yachts. In September, the High Court at Auckland ordered Erceg to pay the amount, but he appealed on whether Balenia had provided enough proof of clear title to the yachts. In April, the court agreed with Balenia and ordered Erceg to pay for the yachts.

    In January, Sensation's Hong Kong bank put Sensation's Henderson base into a mortgagee sale after the bank foreclosed on it.
  14. Brian

    Brian Senior Member

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  15. K1W1

    K1W1 Senior Member

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    Hi,

    I wonder if he will ever actually be brought to book over this particular shady deal.

    I would be surprised if he had slipped up enough to actually be shown as the beneficial Owner of the Cayman Island operations that own the Villa and Yacht.

    He has previously shown he is able to conjure up funds at the absolute last second so lets see what he does this time.

    Selling things he doesn't actually own which he appears to have done with one of the hulls might be one way to have paid his debt to the original purchaser but only if the monies generated by the sale were put towards the overall figure required to settle the outstanding court order.

    I hope for the people who work there that someone does take over these projects and the work continues but as the global economic slowdown has more than made itself felt in NZ as elsewhere, I doubt that there will be as many lining up to take on this type of project as there would have been a couple of years ago.
  16. K1W1

    K1W1 Senior Member

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  17. K1W1

    K1W1 Senior Member

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  18. K1W1

    K1W1 Senior Member

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    Hi,

    It seems that the Russian guy who was being taken for a ride by the Owner of Sensation Yachts has finally got some of what he wanted.

    He has ended up buying the yard and taking possession of the unfinished hulls there after a long and expensive legal battle.

    Lets hope he employs a few of the local tradesmen and gets his boats done at long last.
  19. Yacht News

    Yacht News YF News Editor

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    yea...I read on it this morning..very interesting!