The Directors of Great Southern Limited and Great Southern Managers Australia Limited have appointed Martin Jones, Andrew Saker, Darren Weaver and James Stewart of Ferrier Hodgson as joint and several administrators of the two companies and the majority of their subsidiaries.
Commenting on the appointment, Cameron Rhodes said “The Directors have been left with no alternative but to take this sad and disappointing course of action after the group’s club banks declined to continue to support the company’s restructuring program.”
Rhodes said Great Southern had been working on a restructure program for the past 15 months, recognising the need to diversify its earnings and cash flow, reduce its reliance on annual MIS sales, reduce its level of gearing and to derive more value from its strategic asset base.
“Earlier this year, the company continued its restructuring program by implementing a clear and comprehensive 5 point plan we believe had the capacity to deliver maximum value for all stakeholders of the group. However, while advanced in this short term plan, the company still has some reliance on MIS sales to generate short term cash flow.
“Because of the increasing market uncertainty surrounding MIS sales and the funding of those sales, which were no doubt compounded following Timbercorp’s appointment of voluntary administrators on April 23, the company had begun discussions with our banks in regards to working capital and a request for the provision of a short term bridging facility which would assist the company through to asset realisations, which we had expected would generate over $200m over the coming months. Despite our comprehensive plans which included the listing of cattle stations for auction in June and the sale of other non-core land holdings and not withstanding the fact that the company remained within the terms of its facilities and no debt was currently due and payable, our banking syndicate declined our request for additional support.
“We very much still believe in the strategic plan we had in place and are committed to working with the administrators to capitalize on the work already done and leverage value from the company’s substantial asset base to ensure the best possible outcome for all stakeholders.
Steven Cole, independent chairman of Great Southern Managers Limited as the responsible entity for the forestry, olive, viticultural and almond projects managed by the group wanted to assure project investors that Great Southern’s management team would work closely with the administrators to ensure all project investors interests were protected to the fullest extent possible.
“The GSMAL directors note that the interests of MIS investors are separate from those of the Great Southern group and that the voluntary administrators, who now displace the GSMAL board, are obligated to the same duties as were the directors of GSMAL to act in the best interests of Project investors, and to give priority to those interests,” he said.
More information will be made available on www.great-southern.com.au