Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATE:Southern Cross Forest lures foreign, local interest

UPDATE Southern Cross Forest attracts foreign, local interest, receiver says

(Adds additional comment from receiver)

By Paul McBeth

April 24 (BusinessDesk) - Financially stricken wood processor Southern Cross Forest Products has attracted both local and international interest from potential buyers, and its receiver hopes to progress the sale next month.

KordaMentha’s Brendon Gibson today announced plans to shut the Dunedin-based company’s Rosebank sawmill after a fire at its Mosgiel remanufacturing site cut its drying capacity, reducing the volume of timber it can process, and decided to wind down its unprofitable Australian distribution business.

An information memorandum in the market for potential buyers has attracted a “mixture of both” local and foreign parties, though the strong New Zealand dollar and high log prices are a challenge for the export-focused business, Gibson told BusinessDesk.

“We’re hoping people still see an opportunity,” he said.

More than 40 sawmills have shut in the past decade, and local wood processors have had to compete for supply with global demand pushing up raw log prices, while at the same time low-cost Chinese rivals squeeze export-focused New Zealand mills.

“It is no secret that the company has long struggled to secure sufficient log supplies to feed its South Island mills,” Gibson said in a statement. “That issue has continued to compromise trading in the receivership, but performance has now been further affected with fire damage at the Mosgiel mill.”

Southern Cross Forest Products had three mills in the South Island and one in Thames, and today’s restructuring will result in 79 jobs being lost.

The company had borrowings of $17.7 million as at Dec. 31, 2012 with ANZ Bank, UDC Finance, 321 Ltd, Hunter Finance and Heartland, according to its latest financial statements lodged with the Companies Office.

Its loans with ANZ and 321 were in breach of certain covenants at the time, and the 2012 accounts were tagged by auditor Deloitte over the company’s ability to trade as a going concern.

After the balance date, Southern Cross Forest Products negotiated a new funding facility with ANZ which it said would be reviewed in March 2014.

The company narrowed its annual loss to $1.58 million in calendar 2012 from $2.92 million a year earlier, as it booked a $2.34 million gain on the value of a 2009 acquisition. Revenue climbed 16 percent to $95 million in 2012, though the gross margin was squeezed to 4.6 percent from 8.6 percent in 2011, as the cost of sales rose at a faster pace.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news