White knight to save AHL

27 Jun, 2001 10:00 PM
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A PERTH company is making an eleventh hour "white knight" bid to secure the assets of troubled machinery dealership chain Agro Holdings Limited (AHL).

Farm Weekly knows the identity of the company but has been asked to withhold it because of commercial sensitivities.

It is believed the company is negotiating with major creditor Challenge Bank to take control of AHL.

Earlier this month Challenge had rejected a bid for the whole AHL Group.

AHL was placed into receivership by Challenge and Esanda Finance at the end of March. The company was suspended from the exchange boards on March 27.

Since then AHL has been run by PricewaterhouseCoopers' receiver and manager Geoff Totterdell, who this week is selling AHL branches in Moora, Wongan Hills and Cunderdin. It is believed the respective buyers are Walton's, Carnamah, Jolly and Sons, Dalwallinu, and Avon Tractor and Implement, Northam.

Mr Totterdell already has closed AHL branches in Narembeen and Kulin and it is believed all AHL dealerships will close this Friday, effectively ending the life of the company.

But the Perth company's negotiations could see life breathed into AHL, and there is a chance it could remain a publically listed company.

If the bid is succesful it would mean dealerships at Narembeen, Lake Grace, Wagin and Merredin and the Bird Farm Equipment group in NSW would continue trading.

It is unknown what decisions have been made on private bids for Merredin and Wagin.

AHL staff are banned from speaking with the media about the company and prospective buyers are bound by a confidentiality agreement with Mr Totterdell not to speak to the media on the matter.

An AHL shareholder involved in the new bid said the focus was to ensure an orderly rearrangement of AHL for the benefit of creditors, the staff and the industry.

Many machinery dealers had feared a fire sale of AHL, which would depress market prices.

The new offer, arranged this week, was conditional on unsold dealerships retaining John Deere franchises.

The shareholder, who declined to be named, said the demise of AHL was "an absolute tragedy".

"Greed and self interest has worked against AHL resurrecting itself," he said.

"There have been elements working against AHL."

Farm Weekly has been told many farmers had lost trade-ins and money, in the form of deposits paid for machinery that had not been delivered.

The shareholder said he expected legal action by AHL employees to whom money is owed.

Already one former AHL employee has won a court case for wrongful dismissal.

Since it was floated in May 1999, AHL built up a chain of dealerships totalling 10 in WA and seven in NSW.

At its peak it employed more than 230 people and enjoyed the status as the biggest Flexi-Coil dealer in the world apart from being the biggest John Deere dealer in Australia.

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