The fate of failed diatomite miner Featherston Resources near
Dunedin may be decided this week, as factions look to get a
controlling stake through a creditors' vote in the fertiliser
manufacturer, which was launched in 2011.
Vying Asian companies want to buy out Featherston, by paying
its numerous creditors, while some historical shareholders
have warned the administrators they will oppose the
Crucial to the situation is that creditors, some of whom are
shareholders, will vote on whether to accept or reject either
of the dual proposals being put forward by appointed
administrators Rodgers Reidy Ltd tomorrow in Auckland.
Despite projections of multimillion-dollar annual sales
targets, Australian-based and privately-owned Featherston
achieved only limited sales of diatomite for domestic or
export use and raised just over $100,000 over two years.
Featherston is in administration and receivership and a
creditors meeting is scheduled for Auckland tomorrow. Among
more than 200 shareholders - and creditors - are many from
around the South Island.
Auckland-based Rodgers Reidy has proposals for creditors to
decide on from separate Malaysian and Hong Kong investors,
who are offering respectively $A4.8 million and $A4.15
million, to be used to pay creditors, but leaving
shareholders open to compulsory acquisition or with diluted
The proposal by Plaman Group, representing a Malaysian listed
company, and with Australian banking interests, wants to take
Featherston out of administration, which would be to the
detriment of long-suffering shareholders, who have poured
millions into the company, but who want to retain their stake
and help rebuild Featherston. They would get an unspecified
cash payment, but otherwise be bought out.
The second $A4.15 million proposal, by Ashlaw Legal Services
Pty Ltd, on behalf of a Hong Kong investor, would dilute
shareholders' interests by about two-thirds.
Joint administrator for Rodgers Reidy Ltd in Auckland, Paul
Vlasic, organised the creditors meeting and said in a
''supplementary report'' to shareholders last week, obtained
by the ODT, that Featherston had ''known creditors'', owed in
total $A4.18 million ($NZ4.43 million).
When contacted yesterday, Mr Vlasic said money had been set
aside under the Plaman proposal to buy out shareholders, but
it was ''complex'' to determine exact the amount per dollar
invested, as some individuals would be paid as part of groups
He hoped to be in a position after the creditors meeting to
disclose more detail.
In a private note circulated to Featherston shareholders in
recent days, obtained by the ODT, a major shareholder who
criticises the Plaman Group offer describes themselves as ''
... one of a number of very angry shareholders who are
appalled at the behaviour of the mandated financial advisers
to the company''.
''You will find there is an active and informed group of
dedicated and committed Kiwi shareholders, whom I am sure
will be joined by their Australian counterparts in vigorously
opposing your [administrator's] recommended course of action
and the Plaman Group, no matter what happens at your proposed
watershed [creditors] meeting on Thursday,'' the shareholder
Mr Vlasic noted that creditors would be paid in full under
the proposals, but under slightly different terms, while if
Featherston was placed in liquidation ''no dividend is
expected to be paid to any class of creditor''.
Nor, under liquidation, would it be possible to sell or
transfer the diatomite mining permit, issued by Government
agency New Zealand Petroleum & Minerals, which covers the
diatomite mine in the Maniototo.
Further muddying the situation is Supreme Court litigation in
Australia over the receivership, and roles of receivers and