Who owes how much to whom?

May 21, 2012

Dairy NZ suppliers were told on Friday that they’d have to wait about a month for the $30 million they’re owed.

That is a lot of money for the company that is in receivership and it won’t be all that they owe.

It’s also a lot of money for suppliers who will have bills to pay.

Synlait is showing some interest in the dairy factory but any new owner would be loath to take on the liability for unsecured creditors, among whom are the suppliers.

There is understandable concern about how much of the money they’re owed the suppliers will get and it’s not just farm owners.

Share milkers are also owed money and there is uncertainty about whether that is the company’s responsibility or the farm owners’.

Ian Moore, a spokesman for the farmers who supply milk to NZ Dairies, admitted yesterday he was concerned about the immediate prospects. . .

. . . His main concern was for sharemilkers, who typically own only the cows and share in the milk cheque, who have no equity to fall back on.

Mr Moore has already been in contact with rural bankers from the area who he hoped would turn up to yesterday’s meeting and support the affected farmers, to prevent “anyone from going to the wall” if payments are delayed or do not come through.

Then there are the people who supply and service the dairy farms who will be owed money by the suppliers who are owed money by the company.

One attraction of companies like NZ Dairies is that suppliers don’t have to buy shares as they do with Fonterra. That is of most benefit to those with newer conversions who will be in a weaker position to withstand a delay or loss of payments.

Most if not all suppliers are from South Canterbury and North Otago where the receivership will have an impact on the districts’ economies.


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