Superfert growers to receive 8c payout

10 Feb, 2016 01:00 AM

GROWERS caught up in the collapse of Superfert Dongbu last year can expect a pay out of about eight cents for every dollar lost.

Administrator accounting firm Cor Cordis has called for proof of debt from all unsecured creditors and plans to pay the amounts owing in April.

This pay out will be almost 12 months after the fertiliser supplier went into administration on May 13 last year,effectively halting fertiliser supplies to any of the 50 WA growers with existing contracts with the company.

Cor Cordis accountant Dino Travaglini said it was positive for all unsecured creditors involved that a pay out was now close.

"The dividend amount that we expect to be paid is the eight cent to the dollar mark and it won't be any more than that," he said.

"The dividend the creditors receive will now depend on what number of claims come in.

"Effectively we have a pool under the original agreement of Deed of Company arrangement (DOCA) of $800,000.

"We now have that pool available and we are going to use that pool to make a payment, it's a fixed pool so it just depends on how many claims there are."

Mr Travaglini said he expected about $10 million in claims for money lost to Superfert, but if claims were higher than expected the amount paid to each party would decrease.

Superfert Dongbu was reported to have less than a 10 per cent share of the WA fertiliser market.

It had an annual turnover of about $80m and was registered in 2011 as a part of a joint venture between Superfert and the Korean Dongbu Group.

When the company crashed, preliminary estimates of recoverable assets was estimated at $2m to $3m, a loan by a related entity for $6m also existed and employees are owed about $400,000.

Secured creditor Dongbu, which entered into a joint venture with Superfert in 2011, registered for $28m owed to it.

A full creditors meeting was held on May 28 last year.

At this same meeting, a Committee of Creditors was formed and this committee met several times.

A further full meeting of creditors was scheduled for June and again in July before finally occurring in August.

Growers and a range of other unsecured creditors tied up in Superfert voted for the DOCA at this meeting that left them to receive between seven and nine cents back from every dollar they pre-paid the company.

This was only if the administrators dealing with the company could sell off company assets, otherwise they stood to receive nothing.

As a part of the agreed DOCA, the former employees of the company would receive their full entitlements and the unsecured creditors would share in a pool of between $800,000 and $1.2m released by company partner Dongbu Farm Hannong Co Limited.

This release by Dongbu was to be added to money raised through the sale of the business's assets which include the plant, equipment, intellectual property and goodwill.

Mr Travaglini said he had hoped to sell off the company's assets to provide bigger returns to creditors, but was unable to do so as assets were linked to the property at Kwinana and couldn't be split.

Throughout this process there was dispute over stock held in Superfert's Kwinana facility that was sold off following the company collapse, with funds collected held in trust.

A group of eight growers claimed they had a right to the fertiliser they prepaid before the company crashed.

This was tied up in a Supreme Court appeals process before being dismissed.

Employees have now been paid out their full entitlements as a part of the consolidation of the company's funds.



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If each producer took a small cut in production these poor guys wouldn't be in this situation.
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