28/08/2015 - 15:03

Superfert collapse leaves farmers kicking dirt

28/08/2015 - 15:03

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A big group of Western Australian farmers is among unsecured creditors expecting to receive as little as 7 cents in the dollar from the collapse of failed fertiliser supplier Superfert Dongbu.

Superfert collapse leaves farmers kicking dirt
PALL: Michael Fulwood says some farmers may take up to five years to recover from the Superfert Dongbu collapse. Photo: Attila Csaszar

A big group of Western Australian farmers is among unsecured creditors expecting to receive as little as 7 cents in the dollar from the collapse of failed fertiliser supplier Superfert Dongbu.

Superfert Dongbu entered voluntary administration in May, with a net asset deficit of more than $31 million and a complex web of relationships between related companies.

The business was established in 2011 as a joint venture between the WA-based Ausfert, controlled by the Beyers family, and South Korean company Dongbu Farm Hannong.

It had sales of around $80 million at its peak in 2013.

About 50 local farmers, who had pre-ordered product from the company but did not received their shipments, collectively have been left about $1.6 million out of pocket.

They now stand to secure only a small portion of that amount, between 7 cents and 9 cents in the dollar, according to the deed of company arrangement under consideration.

Brookton grain farmer Michael Fulwood is among those who pre-purchased fertiliser and is unlikely to see his money entirely returned.

“This has put enormous pressure on growers in the eastern Wheatbelt,” Mr Fulwood told Business News.

“The only saving grace was the 100 millimetres of rain we’ve had just recently.”

Mr Fulwood said some growers might take three to five years to recover their losses from the insolvency.

Superfert administrator Dino Travaglini, of corporate insolvency firm Cor Cordis, said Dongbu Farm Hannong was owed around $30 million, and was a secured creditor.

“The creditors resolved to accept a deed of company arrangement proposal that was put up by Dongbu Farm Hannong,” he said.

“The deed, if it is successful, will realise a dividend of between 7 cents to 9 cents in the dollar.

“There are still certain milestones to meet to allow that dividend to be paid.”

In the deed, the secured creditor would release its priority to fund a dividend to unsecured creditors.

Employees would receive a return of 100 cents in the dollar, with more than $230,000 claimed.

According to the administrator’s report to creditors, Superfert Dongbu may have been insolvent as early as January 2014.

The company’s failure, according to the document, could be attributed to accumulated trading losses of $16.2 million over several years.

It is stated in the report that an additional $13.9 million was lost through a another entity, Superfert (EA), which had been established by Superfert chief executive Leroux Beyers in 2011 to trade in the South Australian market.

Mr Beyers referred questions to the administrator when contacted by Business News, however, he said he believed no stock had gone missing and denied that farmers had failed to receive their fertiliser purchases while he was running the company.

Further complications during the past year included litigation between Superfert and other companies associated with the Beyers family, including Valefox, over a guarantee, and Ausfert, over a mortgage.

A prospective buyer was found for the business earlier this year but negotiations broke down prior to the appointment of Mr Travaglini in May.

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