Meatco had planned note issue to raise $2.5M; liquidator left with 1.3 tons of frozen halal meat
By Jonathan Underhill
April 6 (BusinessDesk) - Meatco, a New Zealand processor and exporter of halal sheep meat put into liquidation last month, had planned to raise capital through a convertible note issue to build a processing plant in Shannon in the lower North Island, the first of many, a strategy that was touted to boost earnings by 50 percent.
Instead, the three-year-old business was put into liquidation by a disgruntled creditor, Beirut-based Widriss Holding, a diversified food and commodity trader, "following a non-supply or refund of prepaid stock." Meatco shareholder Michael Stacker and director and former shareholder Robin Bautista couldn't immediately be reached for comment.
Stacker himself and ANZ Bank New Zealand are listed as secured creditors, while unsecured creditors as at March 1 were the ACC, Halls Refrigerated Transport, Polarcold Stores, Rural Livestock and Widriss SAL. Inland Revenue has a preferential claim.
Assets of Meatco, whose associated company Meatco International was also put into liquidation last month, include 1.3 tons of frozen lamb and mutton meat stored at a facility in Timaru. Liquidator Chris Horton of Chris Horton Associates, in his first report, urges any party interested in buying the meat to come forward immediately. There's also $235,803 in debt due on the receivables ledger.
Polarcold chief executive Steve Foote confirmed his company owns the facility where the meat is being held and says by all accounts it is in good condition - "all cartoned, presumably for export." Meatco had been a relatively small client that had been operating for a couple of years, he said.
Meatco had the capacity to halal slaughter and process up to 15,000 sheep each week and can supply a diverse range of halal lamb and mutton products ranging from whole carcasses, cuts or boneless meat, according to its website.
The company's failure may be more curious because according to Hawke's Bay Today, North Shore businessman Michael Stacker was previously known as Husain Khalil Al Saffaf and under that name had been sentenced to home detention over the filing of false tax returns in 2014. The newspaper said he was prosecuted by the Serious Fraud Office for similar offences in 2009 and banned from being a company director for five years.
Horton said the liquidators had come to "the reasonable conclusion" that it was the same man, the report said. Horton didn't immediately return calls. Al Saffaf has been involved in a number of property development companies and a forestry trust, including the developer of a luxury marina-side apartment complex in Whitianga which fell foul of the Department of Building and Housing that had its code of compliance revoked because of building defects.
It's a far cry from what Meatco was trying to achieve. According to a notice of the website of advisory firm TBK Capital dated October last year, the company was targeting a global halal food market worth US$240 million a year with growth forecast over the next five years of 15.5 percent.
Meatco "has built long-term relationships with suppliers who understand the requirements of their discerning customers." Since 2016 it had become one of New Zealand's leading suppliers of halal lamb products in the Middle East and South East Asia. Meatco International was planning to raise $2.5 million via a mandatory convertible note that would pay interest of 10 percent and help fund the processing plant in Shannon, which would be leased from another associated company.
The new plant was to have 10 times the capacity of Meatco's existing Christchurch plant and remove the need for the company to have lamb processed by third parties. "With its own plant Meatco will obtain the lamb and from this change alone, on current throughput for the business, these cost reductions would result in an increase in gross profit of more than 50," the TBK Securities note said.
"The owners of the plant intend to open more plants in New Zealand, the next being in the South Island," the October note from TBK's John Paine says. "Their background includes over 40 years’ experience in meat processing and rendering and in international sales of meat products."
Today TBK said the convertible note sale didn't proceed.