Nelson Forests was to meet with the administrators trying to rescue log transport business Waimea Contract Carriers that owes NZ$14 million. Sources: Stuff NZ, The Nelson Mail
John Fisk and Richard Longman, partners of PwC, were appointed administrators of Waimea Contract Carriers and have 25 days to come up with a plan for the company, which employs 120 staff.
It has a fleet of 80 trucks, and transports logs for Nelson Forests, Hancock Forest Management and Nelson Pine Industries.
Nelson Forests managing director Lees Seymour said they were meeting with the administrators to get more detail.
The two companies have a significant relationship.
Mr Seymour said he had been overseas so had not been aware of the company’s decision to go into administration, but said it was good that it was voluntary.
He said the administrators had asked that Nelson Forests continue doing business with the company.
He understood Nelson Forests was about 50% of Waimea Contract Carriers’ business.
Asked if Nelson Forests might help bail out the company by investing in it, Seymour said it was too early to speculate and he did not have enough detail.
Nelson Forests was in the process of working with its transport providers reviewing contracts, but that was a separate process.
Asked if he thought Waimea Contract Carriers would fold, Seymour said: “I would like to think that very unlikely.”
However, if it did “that’s a disaster for everybody – them, their employees and us. We are thinking positive. There is ongoing work. I think there has to be a way”.
Industry players have said margins have become too tight for contractors in the forestry sector.
“I have no idea what contractors’ margins are. All the contractors who work for us are doing OK,” Mr Seymour said.
The administrators have called a first meeting of creditors on 13 April 2015.
