09 May

Australia: Timbercorp olives sold to harvester

By Rachel Hewitt,

The harvesting of Timbercorp’s giant olive crop will resume this morning after the company struck a $15 million deal to sell the fruit to its harvester.

timbercorp-logoThe fate of this year’s crop – at two olive groves in northern Victoria – was uncertain after the company’s April 23 collapse.

The harvest must be completed in seven weeks and Timbercorp does not have the money.

After a day and a half in the Federal Court in a desperate bid to finance the harvest, administrator Mark Korda struck a deal to sell the 2009 olive crop to Boundary Bend – the company that harvests and processes the fruit.

“What Timbercorp and Boundary Bend have agreed and the court has said is non-controversial is that Timbercorp will sell the crop of olives to Boundary Bend for approximately $15.5 million with some rise and fall adjustments later on,” Mr Korda said.

The 6500ha crop will be sold to Boundary Bend for about $26 million, and the harvester will spend about $11 million processing and harvesting it.

Mr Korda said it was the same commercial outcome he had been trying to achieve through an application to the court for approval to use proceeds from the sale of olive oil from the 2008 crop to fund the 2009 harvest.

“Boundary Bend has been able to reorganise its finances on the basis it could buy the crop upfront so it’s funding the working capital,” he said.

“It’s a very practical solution.”

Boundary Bend executive chairman Rob McGavin said he was “absolutely delighted” by the outcome, particularly for the managed investment scheme growers.

“Boundary Bend has managed to come up with a solution which in effect seems to them a lot better off,” he said.

Harvesting of the crops – in Boort and at Boundary Bend near Robinvale – will start at 6am today.

On Tuesday, Mr Korda faced a packed meeting of hundreds of grower-investors, anxious about the future of their crops.

Timbercorp, which manages farm investment schemes of plantation eucalypts, olives, almonds, citrus, mangoes, bananas and tomatoes, went into voluntary administration owing $903 million.

The agreement came as the shares of Perth-based managed investment scheme promoter Great Southern were placed in a trading halt pending an announcement “in relation to its MIS sales program and working capital requirements”.

The trading halt came after Great Southern last week announced it would auction three cattle properties in northern Australia next month.

Great Southern last month said it needed to repay or renegotiate $105 million debt in October.

“My expectation is it’s probably something to do with the beef cattle properties and projects they’re looking to offload,” said one analyst, who declined to be named.

“These guys need to sell these beef cattle assets, otherwise they’re not going to survive.

“All I can speculate is there’s been negotiation to sell some assets.”

The company is due to release its first-half results this month.

Great Southern shares last traded at 12.

[Source] Click here

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