Agro Holdings could have been saved: shareholder

24 Apr, 2001 10:00 PM

TROUBLED machinery dealership chain Agro Holdings Limited (AHL), now up for sale, could have been saved, according to a major shareholder.

Perth financier London Partners, which was the original underwriter of the AHL float on the Australian Stock Exchange, claims shareholders were not told of the decision to place AHL into receivership.

The company's managing director Victor Melville said he believed a rescue bid could have taken place before the appointment of a receiver and manager.

"In fact we wrote to AHL advising them we could raise up to $4 million to assist with financing," he said.

"My concern is the company (AHL) didn't give shareholders an opportunity to assist it.

"It's absolutely abhorrent that elements of the AHL board chose not to seek assistance of the shareholders.

"London Partners had a 17pc shareholding in AHL and we raised $8m (during the course of its existence since it was floated in May 1999).

"We weren't consulted and given an opportunity to rectify the problem.

"If we had been told of the plight of the company, we would have negotiated with financiers believing the appointment of a receiver and manager would not be needed."

Last Saturday, receiver and manager Geoff Totterdell advertised the sale of the AHL Group.

Expressions of interest must be in his hands by noon, next Wednesday. If there is none, it is assumed the company's assets will be sold on instructions of financiers.

This would entail a fire sale of equipment and the immediate devaluation of the second hand market, something which the Farm Machinery Dealers Association (FMDA) of WA says will put pressure on all machinery dealers.

Up for sale are WA dealerships Aquip Machinery (Narembeen, Kulin); Lake Grace Machinery (Lake Grace); Marley White and Co (Wagin, Narrogin); Carson's of Merredin (Merredin, Mukinbudin); and Agro Machinery (Wongan Hills, Moora and Cunderdin).

AHL's NSW dealerships on the market come under the Bird Farm Equipment banner with branches in Dubbo, Warren, Parkes, Wellington, Condobolin, Bourke and Coonamble.

FMDA secretary Sandy Lewis said the demise of AHL was "extremely disappointing".

"We wonder how much thought has gone into this, but there is nothing we can do," he said.

"We are very apprehensive about the effect it will have on other dealers if a fire sale is held.

"All machinery would be devalued and it would put a lower floor in the used market."

John Deere dealership group spokesman Hal Walton, Carnamah, said it was hoped the matter could be resolved and the dealerships concerned would be "back and running" with as least fuss as possible.

Meanwhile, Aquip Machinery dealer principal Mick Woodley is seeking help from farmers to keep the business alive in Narembeen and Kulin.

A farmer company, Wyndermere Pty Ltd, owners of the Narembeen premises, will meet this week to discuss the potential to keep the business going.

AHL originally bought Aquip from Wyndermere and leased the Narembeen premises with the option to purchase on May 21 this year.

"We've already had one meeting of shareholders (of Wyndermere) and I'll be giving it my best shot to keep the business alive," Mr Woodley said.

"I can't see any white knight galloping in to save us and there are some hurdles to get over, particularly in this tough trading environment.

"I'm approaching farmers in Narembeen. Corrigin, Bruce Rock, Holt Rock and Kulin but it's difficult because three of those shires have qualified for exceptional circumstances funding because of poor seasons."

Mr Woodley, who has been a machinery dealer for 21 years, said 17 employees would be affected if Aquip Machinery closed.

"It would mean 10 families would leave Narembeen which would have a big affect on the local community," he said.

Farm Weekly contacted Mr Totterdell but he had not replied as the publication went to press.



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