Debt-laden agribusiness investment firm Timbercorp has today appointed voluntary administrators, prompting concern for the managed investment scheme sector.
Debt-laden agribusiness investment firm Timbercorp has today appointed voluntary administrators, prompting concern for the managed investment scheme sector.
Administrator KordaMentha said the company has fallen victim to the global financial crisis.
The move follows the company's announcement last week that it may not be able to continue as a going concern unless it renegotiated its debt facilities or restructured by the end of April.
"The company has been hurt by the combined impact of declining global asset values, tightening credit, the economic downturn and drought," KordaMentha administrator Mark Korda said on Thursday.
Mr Korda said the administrators would immediately suspend forestry and horticulture operations while funding options were determined.
Timbercorp has about 170 staff in Melbourne, Perth, Hamilton, Mildura and Penola.
The administrators will develop a strategy for each forestry and horticulture product, project by project.
Timbercorp offered managed investment schemes based on its agribusiness estate.
Mr Korda said Timbercorp had invested more than $2 billion in agribusiness projects on behalf of 18,500 investors since 1992.
Timbercorp manages about 120,000 hectares of large-scale forestry and horticulture assets, with 32,000 hectares in plantations and projects in Western Australia.
Timbercorp had current debt of $568 million and net debt of $903 million at September 30, 2008.
The company has net assets of $595 million.
Lenders to Timbercorp are believed to include Westpac, Commonwealth Bank, ANZ and BOS International.
"ANZ is appropriately provided for its exposure to Timbercorp. As usual, we will be discussing group provision levels at our interim results on 29 April," an ANZ spokesman said.
Last week, Timbercorp said that a program of forestry asset sales announced in November 2008 - aimed at reducing debt and funding operations - may not be achieved because the indicative offers received were too low.
Consequently, Timbercorp was talking to its financiers about renegotiating, extending and amending its debt facilities.
The company was considering funding and restructuring options aimed at raising extra cash for operations, and reducing debt.
Timbercorp had loan facilities totalling $568.9 million, of which $562.9 was fully drawn.
Timbercorp shares were suspended from quotation on the Australian stock exchange and last traded at 4.4 cents.
Meanwhile, almond grower Select Harvests Ltd, which manages some almond orchards for Timbercorp, on Thursday requested a 48-hour trading halt to assess the effect on the company of Timbercorp going into administration.
Timbercorp has an 11.5 per cent shareholding in Select Harvests.
CostaExhange Ltd, which manages some Riverland citrus operations for Timbercorp in South Australia, said it would meet the Timbercorp administrators to discuss these operations in due course.
Timbercorp's fall into administration may cause concern for other MIS players, including Western Australian company Great Southern which recently underwent a $700 million restructure including the purchase of MIS assets, which had delivered worse than expected returns.
Shares in Great Southern closed down 12.5 per cent to 10.5 cents today.
