The Lighter Note
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Letari drowns in olive oil
Paul Letari is known in property circles as one of the largest investors in industrial land in Perth. He is reputed to own a large chunk of Welshpool and is considered one of the sector’s more colourful identities.
But The Note reckons his foray into the listed company sphere is not looking too flash.
Mr Letari’s family company, Toscana (WA), is the largest shareholder in struggling olive oil producer, Frankland River Olive Company.
Its investment has been getting larger and larger, ever since Toscana agreed in December 2010 to bankroll the company by underwriting a rights issue and launching a takeover offer.
The takeover allowed other investors, including Coogee Chemicals boss Gordon Martin, to exit the share register, and left Toscana with a 68 per cent stake.
The rights issue was meant to fund the repayment of bank debt, as well as loans to Toscana totalling $2.1 million.
Far from getting its debt repaid, Toscana has loaned even more money to Frankland. Its debt increased by just more than $1 million last financial year, hitting $4.1 million at June 30.
Frankland had total revenue of just $3.2 million last year and posted a net loss of $2.6 million, so it will be interesting to see how it repays the debt.
Mr Letari took over as chairman earlier this year and Ricardo Letari has also joined the board, so the family has a close view of proceedings.
The same can’t be said for ordinary shareholders. The company’s shares were suspended from official quotation this month after Frankland failed to lodge its annual accounts by the due date.
The challenging turn of events might make Paul Letari reflect on the bullish comments he made in a letter to shareholders in 2010.
After introducing Toscana as having interests in industrial property, building, industrial sign manufacturing, cattle farming, pumps and capital equipment trading, he said: “we are of the firm view that Jingilli olive oil is amongst the finest quality in the world and see growth of this brand globally”.