Drought, taxation changes and the financial crisis have proven a heavy burden for Australian agribusiness company Timbercorp, which announced last week all of its horticultural assets were up for sale to pay for over half a billion dollars in debt.
The company, which makes most of its money by running its own agribusiness ventures and leasing out land to plantation managers, has seen most of its revenue stream dry up in the last few years.
Plans to sell 50,000ha of timber plantations fell through last week, and Timbercorp’s chief executive Sol Rabinowicz said the fire sale would be broadened, reported The Age.
“Given the situation on the forestry assets, we’ve now broadened the sale program,” Mr Rabinowicz said. “We’re open to the sale of any of our horticultural assets.”
He also did not rule out the possibility the whole company could be sold.
“From mid-2007, all of our funding sources, our equity, debt and an ability to sell assets, have essentially been shut down,” Mr Rabinowicz said.
“As a result of the drought, we have had to buy tens of millions of dollars worth of temporary water to supplement low allocations. Both we and investor growers have had to bear that cost over the last three years.”
The company has loans of A$562.9m, with A$10m in repayments due on 1 May, with more due throughout the year.
“Unless the company is able to reach agreement with its financiers to restructure the existing debt facilities, there is significant uncertainty regarding the ability of the company to continue as a going concern,” Timbercorp announced on its website.
Timbercorp owns several of the largest horticultural estates in Australia. An example of this lies in Dimbulah in northern Queensland, where the company owns the largest mango plantation on the Atherton Tableland.
The Dimbulah property produces 5 per cent of the region’s mango output with 64,000 trees.
Oolloo Farm Management, trading as One Harvest, runs the plantation on behalf of Timbercorp, and said it would work with the company to ascertain the plantation’s future.
“Our operations are not impacted at this point and we will be working closely with Timbercorp to understand what the implications are, if any,” One Harvest spokeswoman Felicity Robson told The Cairns Post.
