24 December 2008
Fonterra confirmed today that a court in Shijiazhuang China has issued a bankruptcy order against Sanlu, in response to a petition from a creditor.
Sanlu will now be managed by a court-appointed receiver who will assume responsibility for an orderly sale of the company's assets and payment of creditors. The receiver will have six months to conclude this process.
"This bankruptcy order is not a surprise to us. We were aware that Sanlu was in a very difficult situation and faced mounting debts as a result of the melamine contamination crisis," said Fonterra CEO Andrew Ferrier.
"We have been aware of this commercial reality and that was the reason we elected to write down the full value of our investment in Sanlu.
"There will now be a formal process to ensure that creditors are dealt with in accordance with Chinese law."
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* Fonterra is the world's largest dairy exporter, with annual revenues of about NZ$17 billion*.
* As New Zealand's largest and truly multinational business, Fonterra trades in 140 countries.
* Our portfolio includes dairy ingredients, liquid and powdered milks, cultured foods and yoghurts, butter, cheese and specialty foodservices products.
* Our brands include Anchor, Anlene, Anmum, Fresh n' Fruity, Mainland, Peters & Brownes, Tip Top, and Chesdale.
* Fonterra reported revenues of NZ$19.5 billion for 14 months ended 31 July 2008.