Another Japanese company has terminated its supply and purchase agreement with failed agribusiness group Great Southern.
Hokuetsu Kishu Paper Company exercised its right to terminate the deal under a provision in the agreement.
Hokuetsu was buying hardwood woodchips from the plantation estates that Great Southern was managing on behalf of investors in the Green Triangle region of south west Victoria and south east of South Australia.
Earlier this month, Japan's Itochu Corporation terminated its agreement to buy hardwood woodchips from Great Southern's 1996 to 2001 plantation schemes.
Itochu intends to negotiate a new short-term contract, which is likely to reduce returns to investors in Great Southern timber projects.
The announcement is below:
Great Southern Managers Australia Limited (ACN 083 825 405)
(Administrators Appointed) (Receivers and Managers Appointed) ("GSMAL")
Termination of Supply and Purchase Agreement with Hokuetsu Kishu Paper Company Limited
Japanese pulp and paper company Hokuetsu Kishu Paper Company Limited has exercised its right to terminate the Supply and Purchase Agreement ("SPA") with GSMAL, relying on a clause in the SPA that entitles Hokuetsu Kishu Paper Company Limited to terminate the SPA in the event of appointment of administrators and receivers.
The SPA encompassed the sale of hardwood woodchips from the hardwood plantation estate GSMAL manages on behalf of its investors in the Green Triangle region of south west Victoria and south east South Australia.