Tired of fertiliser jokes? Then relief is in sight because soon we will see through the ammonia cloud hanging around Burrup Fertilisers and get to the critical issue - where's the money.
Tired of fertiliser jokes? Then relief is in sight because soon we will see through the ammonia cloud hanging around Burrup Fertilisers and get to the critical issue - where's the money.
More specifically, there is the question of where has the money gone, something which the receivers who now control the books of the failed business are slowly discovering.
So far, most of the smoke coming off Burrup Fertilisers has been created by a combination of public fascination with exotic Indian architecture in the heart of Perth's ritziest suburb, Peppermint Grove, vegetarian food, and whether the company's founding Oswal family will return from holidaying in India.
Flimflam is what that sort of talk used to be called because it has absolutely nothing whatsoever to do with a business which has suffered an internal partnership implosion over something far simpler; trust and money.
Consider the facts, and then some of the public relations spin wrapped around those facts designed to portray players in the game in their best possible light. The facts are:
- Burrup Fertilisers is a profitable business largely because of a low-priced gas supply contract negotiated when fuel prices where a fraction of what they are today.
- The terms of that gas supply contract, which is absolutely critical to the business, are in dispute.
- The minority partner in the business, a Norwegian company called Yara, claims it has not been fairly treated by the majority partner, the Oswal family.
- The Oswal family has left the country and declined to attend yesterday's preliminary meeting between the receivers and interested parties.
If it was any other business the way forward would be clear. The receivers would gather the facts, sell assets, pay creditors file a report at the Supreme Court, and lodge a copy with the Australian Securities and Investments Commission.
Enter the spinners who have been weaving their magic over a bog standard story of corporate failure.
The spin started with:
1. Claims that Burrup was a very profitable business and would be sold for a small fortune with everyone walking away with full pockets and a smile on their faces: Wrong.
Whether Burrup is profitable today has nothing to do with what happened up to the point of the receivers being appointed. All that matters is what happened to the money up to that point, and whether all the appropriate corporate reporting rules were followed. That's what the receivers are looking at and what will interest ASIC.
2. Claims that buyers are forming a queue to acquire the business. Wrong.
Interested "tyre-kickers" are at the receiver's door because they smell a potential bargain and know that assets sold by receivers are often cheap, especially as this one might come with a disputed, but critically important, gas supply contract.
3. The Oswals will get a fat price for their partly completed Peppermint Grove mansion. Wrong.
They will get, at best, block value - and block value in a depressed property market. The only logical buyer of an incomplete monster Indian home in Perth is another rich Indian, and even then no rich Indian is going to pay full price for an asset being sold by a rival. He can build his own Taj Mahal.
The list goes on, but you get the picture. There is nothing special about the troubles at Burrup Fertilisers. It is just another failed business and whether the failure is the result of external market forces or internal shareholder disputes is irrelevant. It is still a failure.