Hundreds of Otago workers face an uncertain future after
Southern Cross Forest Products Ltd was placed in receivership
The company is one of New Zealand's largest processors and
manufacturers of pine products, and has corporate
headquarters in Dunedin.
It owns sawmills and pine manufacturing sites in Mosgiel,
Milburn, Milton, Balclutha and Thames.
The majority of its 400 staff are in Otago.
Brendon Gibson, of receiver KordaMentha, said there were no
planned redundancies at this stage.
He visited all Otago sites yesterday to tell staff of the
Mr Gibson said the business would be advertised for sale as a
going concern, and operations would continue as normal in the
''We are working with a very strong management team to keep
the business trading profitably while we run a sale process.
''We'll put all of the business up for sale and then people
can decide if they want to bid for the lot or anything
Mr Gibson would not say how much debt the business owed.
A financial analysis of the company will be prepared and
published within two months.
''It's fair to say that the business has struggled in the
macro-economics of wood processing at the moment and as a
result of that has too much debt.
''It's been decided the best thing to do is try and sell the
business as a going concern by receivership,'' Mr Gibson
The company's last financial statement, published in July,
showed it owed $57.9 million and had assets totalling $78.8
million as at December 31, 2012.
It said the company was in breach of its banking covenants
with ANZ Bank and 321 Ltd, and had negotiated a new funding
agreement with ANZ to meet its 2013 budget.
The funding agreement came up for review this month.
The financial statement said directors were aware of risks
with future trading losses, but expected to be able to meet
financial requirements by this month and have the funding
The New Zealand Forest Owners Association said about 40
sawmills had closed nationwide since 2003.
Southern Cross Forest Products managing director Tom
Whitefield, of Dunedin, did not return calls yesterday.
Clutha Mayor Bryan Cadogan said his heart went out to the
company, its staff and their families.
The business was a strong supporter of work programmes and a
major employer in the region, he said.
''While we hope for the best, we'll certainly be trying to
make sure we mitigate against any impact on individuals in
Southern Cross Forest Products
• One of NZ's largest processors/manufacturers of pine.
• Corporate headquarters in Dunedin.
• 400 staff at six manufacturing sites in Mosgiel, Milburn,
Milton, Balclutha and Thames (2).
• Offices in NZ, Australia, US, China.
• Placed in receivership March 3, 2014.
• For sale as a going concern.
• Assets totalling $78.8m as at December 31, 2012.
• Debt of $57.9m as at December 31, 2012.