Leading construction company Ebert Construction has gone into receivership and initial signs suggest the company could owe as much as $40 million.
The company specialises in commercial and industrial work and has done a lot of construction in the dairy and food processor sectors.
Workers and contractors arrived at sites around the country this morning to find themselves locked out.
A security guard kept watch and the gates remained locked at the company's Union Green construction site in Auckland as a stream of workers arrived and milled around outside.
Contractors at the firm's Union Green apartment project in Auckland were given a letter from the receivers when they arrived at work.
In the letter, the receivers said the workers would have to go through the receivership process to get their assets back.
One worker said they had been told it could be up to a week before they could be allowed to retrieve their tools.
The appointed receiver, PricewaterhouseCoopers said Ebert directors received information last week that suggested there would be significant losses from its existing contracts.
It said initial signs suggest the company could owe as much as $40 million.
Worker Lotu Samuelu, said the news came out of the blue.
He said the closure meant workers had no access to their own tools.
"On our way to work this morning our boss told us the site has been shut down," he said.
"We were a bit frustrated because we still had all our tools on site so we are just trying to get them back.
"Those tools help us feed our families and the banks don't care about that so we're just doing our best to get as much off site as we can."
Mr Samuelu said there was a site meeting this morning and they hoped more information would be available.
Receiver John Fisk of PricewaterhouseCoopers said the only firm affected was Ebert Construction Ltd.
"None of the other companies in the group are in receivership," he told Morning Report.
Ebert's sites also include Middlemore Hospital in Auckland, the Indian High Commission in Wellington and a number of projects in the South Island, he said.
No one at the Ebert head office in Wellington would speak to RNZ, and said all enquiries would be dealt with by a receiver at PricewaterhouseCooper.
Officers at the Indian High Commission appeared shocked at the news, and also refused to comment.
Counties Manukau District Health Board contracted Ebert Construction to develop its new mental health facilities and said it was now considering its options.
Mr Fisk said the board of directors got new information about a week ago about how poorly some contracts in the Auckland region were performing and concluded they could no longer continue to trade.
He was appointed receiver at 7pm yesterday.
Mr Fisk would not disclose the information directors gave him but said it showed the company was going to incur significant losses.
Ebert has done work in the past for district health boards, the dairy industry and the New Zealand Defence Force.
Just four weeks ago, it announced it had a contract to design and build a new milk powder plant in Pokeno for Synlait.