ANZ National has appointed KordaMentha as receivers to fruit and vegetable processor Cedenco Foods, putting up to 500 jobs at risk while KordaMentha hunts for a buyer so ANZ can be repaid "10's of millions" of dollars in loans.
(Update 2 includes details from KordaMentha press conference.)
Receivers Brendon Gibson and Michael Stiassny said they were confident that Cedenco's operations would continue through the summer season, with ANZ National supplying funding for the Gisborne and Hawkes Bay company to pay growers and workers.
Gibson and Stiassny said there had been a breakdown in governance and ownership issues surrounding Cedenco's ultimate US shareholder which gave ANZ National no choice but to place the New Zealand company in receivership. The New Zealand business was operated quite separately from American entities, the receivers said. Cedenco's ownership was a "complicated structure", they said.
Gibson said the fact they had already secured funding to keep the company operating meant they did not feel under any pressure to sell Cedenco and were not looking for a fire sale. Gibson said the aim was to "get it trading in a comfortable manner" before selling Cedenco as a going concern. The "substantial" funding meant Cedenco would still purchase crops planted by growers this season.
Asked whether a sale would likely be made at the end of the summer season, the receivers said it "may be a 2010 job".
Cedenco currently employs 88 full time workers and around 410 seasonal workers in the Gisborne and Hawkes Bay regions.
Gibson said there were no other major financiers involved in the business other than ANZ National.
Cedenco's former US sister company, SK Foods, filed for bankruptcy in May this year before being sold to Singaporean company Olam International. A former top executive of SK Foods, Alan Huey, has this week pleaded guilty to a conspiracy charge that between 2004-2008 he bribed food companies and shipped mislabeled tomato paste that exceeded US government mould standards, the San Fransisco Chronicle reported
The charge followed an earlier guilty plea from former SK Foods sales broker Randall Rahal of price fixing and racketeering. Rahal admitted bribing employees of Kraft Foods, Frito-Lay and B&G Foods.
Here is the statement from ANZ National:
ANZ to fund Cedenco Foods to keep business operating
Today ANZ National Bank Limited appointed receivers into food processors Cedenco Foods.
ANZ National has committed seasonal funding to the receivers to allow Cedenco to continue to trade.
ANZ National recognises the importance of Cedenco to the Gisborne and Hawkes Bay communities and wishes to reassure these communities that seasonal funding is in place. ANZ National also wishes to reassure the growers who have planted crops for Cedenco that there is funding to meet Cedenco's obligations to purchase those crops.
ANZ National's Australian parent company, Australia and New Zealand Banking Group Limited, has also appointed receivers into SK Foods Australia Pty Limited, Cedenco JV Australia Pty Limited and SS Farms Australia Pty Limited in Northern Victoria, Australia. Seasonal funding has been committed to the receivers of these businesses also.
An ANZ spokeswoman said they would not make further comments on the size of its loan to Cedenco or how much the extra funding would be.
Here is a statement from KordaMentha on the announcement:
Following a breakdown in governance and ownership issues, ANZ has appointed Michael Stiassny and Brendon Gibson of KordaMentha as receivers to Cedenco Foods.
In recognition of the importance of Cedenco to the Gisborne and Hawkes Bay communities, ANZ National has ensured seasonal funding is in place. Growers who have planted crops for Cedenco should also be reassured there is funding to enable Cedenco Foods to purchase those crops.
Brendan Gibson comments, Whilst the business will ultimately be sold we are in a fortunate position of having funding from ANZ National who is committed to the future of this business.
This is not a dissimilar situation to our involvement with other companies such as Central North Island Forests which we ran for some time enabling us to optimise its value when selling it.
We are working with a strong management team, and are assuring current employees, the large seasonal workforce, customers and suppliers that it will be business as usual and we are not looking for a fire sale, says Mr Gibson.
The Australian and New Zealand Banking Group (ANZ) has also appointed receivers into SK Foods Australia Pty Limited, Cedenco JV Australia Pty Limited and SS Farms Australia Pty Limited in Northern Victoria. ANZ has committed seasonal funding to the receivers of these businesses also.