17/05/2010 - 13:34

Rewards calls in administrators

17/05/2010 - 13:34

Bookmark

Save articles for future reference.

The ailing agricultural managed investment sector has claimed another victim with private Western Australian player Rewards Group falling into administration.

Rewards calls in administrators

The ailing agricultural managed investment sector has claimed another victim with private Western Australian player Rewards Group falling into administration.

It is understood that jittery global markets undermined efforts by Rewards to raise capital and distance itself from the precarious MIS sector which has seen the collapse of giants Timbercorp and Great Southern last year, followed by the appointment of administrators to Forest Enterprises Australia last month.

The directors of Rewards are believed to have yesterday appointed Martin Jones, Darren Weaver and Andrew Saker of specialist insolvency firm Ferrier Hodgson.

All three have been heavily involved with the complex administration of Great Southern.

Rewards Group had been pinning its hopes of a capital raising of at least $55 million as part of a merger with listed ARK Fund in a move that was intended to align its capital base with the longer term nature of the forestry and agribusiness sector.

The funds were to be used pay out about $20 million in bank debt as well as help provide capital to fund this year's proposed MIS raising and see the company through until its forestry assets reach harvest.

Apart from being a big shareholder in ARK and guaranteeing part of its debt, Rewards leases land the listed company. The pair's key management players are business associates.

A cornerstone investment group from Singapore and Sydney had committed $10 million and was prepared to underwrite a further $2.5 million of the convertible bond issue that was the vehicle for the raising. That consortium's investment, however, was contingent on raising additional funds.

It is understood efforts to raise in the capital in Asia were stifled by jittery global markets, led in part by question marks over the health of Greece and other European economies.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options