One of Australia’s largest tomato processors, the Victorian-based Cedenco, has been placed into receivership by ANZ with debts of more $40 million.
Yesterday ANZ placed Cedenco and related companies including SK Foods Australia, SS Farms Australia into the hands of receivers Craig Shepard and Mark Korda of insolvency firm KordaMentha.
The firm’s New Zealand operations have also been placed in receivership.
“Following a breakdown in governance and ownership issues in the related New Zealand entity, the secured creditor has appointed receivers across the Cedenco group,” Shepard said in a statement.
“The receivership will preserve the business and allow it to continue to trade on a business as usual basis.”
Cedenco’s processing facilities in the Victorian regional town of Echuca, which process around 2,000 tonnes of tomatoes a day and employs up to 200 people during the peak processing season, will remain open thanks to a “seasonal funding” arrangement from ANZ.
The receivers will then offer the business for sale.
“The secured creditors recognised the importance of Cedenco Australia to the local economy and would provide funding to operate normally through the peak processing season which begins in January 2010,” Shepard said
While it is not clear what the “breakdown in governance and ownership issues” referred to by Shepard actually mean, Cedenco’s former parent company, the United States-based SK Foods, has been beset by problems in the last six months.
The company collapsed into Chapter 11 bankruptcy in May this year and was sold to a Singaporean food company, Olam International, in June.
But for the last few months SK Foods has been at the centre of an investigation by the Federal Bureau of Intelligence and the US Government tax agency the Inland Revenue Service, over allegations that company executives were involved in conspiracy to routinely falsify quality-control documents on food products and bribe buyers at major customers.
Late last week, former SK Foods executive Alan S. Huey, plead guilty to his part in the conspiracy. He was the second SK Foods executive to do so.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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