Cottonsoft makes loss in 2011, receives capital injections

Cottonsoft makes loss in 2011, receives capital injections

By Pam Graham

Oct. 10 (BusinessDesk) – Cottonsoft, the maker of Tuffy paper towels and Kiwisoft toilet tissue, has received capital injections from its foreign owner after breaching its bank covenants in 2011.

The company didn't pay a dividend to Asia Pulp and Paper in the 2011 calendar year in a period which it reported an operating loss of $2.63 million.

That was wider than the loss of $1.51 million the previous year, mostly because of an increase in operating and distribution costs.

Revenue rose to $80.57 million from $72.83 million the previous year, accounts filed to the Companies Office show.

The bottom-line loss of $2.4 million was wider than the loss of $2.04 million the previous year.

Cottonsoft makes toilet tissue, paper towels and serviettes from imported paper.

Its accounts show that it breached its bank covenants in 2011 and that an $800,000 term loan was due to mature on July 1, 2012.

A company spokesman said the loan had been paid up and the company had received capital injections from its parent. It received $US1.6 million on July 25, US$500,000 on Aug. 27 and $US900,000 on Sept. 18.

The company has been the target of a campaign by Greenpeace over the environmental sustainability of its paper and by competitor Carter Holt Harvey which failed to have it on for claiming its products were New Zealand-made when the raw materials were imported.

The company has $3.35 million of tax losses available to offset against future income tax.

Cottonsoft makes Tuffy Paper Towel and Paseo, CottonSofts and KiwiSoft Toilet Tissue.

(BusinessDesk)

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