Pro-Pac creditors owed upwards of $26m as Federal Court approves rescue funds
The first creditors of collapsed packaging giant Pro-Pac – backed by billionaire Raphael Geminder – have emerged, with businesses owed over $26m, including big names such as Arnott’s Biscuits.
The first creditors caught in the collapse of packaging giant Pro-Pac have emerged, with various businesses owed more than $26m, including big names such as Arnott’s Biscuits.
Staff are individually owed as much as $270,000 in entitlements, it can also be revealed.
It comes as the Federal Court granted a $22.6m funding lifeline for the administrators to help keep the ASX-listed Melbourne-based business trading through administration.
Pro-Pac Packaging Group, a major manufacturer of flexible and industrial packaging which is estimated to employ over 500 staff across Australia and New Zealand, plunged into administration late last month.
McGrathNicol’s Robert Smith and Keith Crawford were appointed voluntary administrators over the group and its 23 Australian subsidiaries. Two New Zealand entities are also in administration.
The company is backed by billionaire businessman Raphael Geminder and makes everything from fresh produce bags for vegetables and fruit, to plastic trays for food producers and PPE for medical companies.
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While the total amount owed to creditors remains unknown, minutes from the first creditors’ meeting lodged with the corporate regulator offer a glimpse of the various outstanding debts.
Listed creditors include Arnott’s Biscuits owed over $1.1m, alongside colourants manufacturer Durocolour Australia ($797,949), property fund GDA Diversified Property Trust ($1.9m), resin and film distributor Primaplas ($3.7m), industrial and consumer products company Sonoco Australia ($1.2m) and film manufacturer Taghleef Industries ($1.4m).
Dozens of employees are listed as being owed money, with some out of pocket as much as $274,753.
Other creditors include consultant StrategicAlliance Consulting Services ($44,500), engineer consultant Kirk Engineering Services Aust ($190,644), plastics supplier B & H Packaging ($77,971), and companies Polymer Connect ($107,603) and Holland Glen ($56,073).
The business owes its major shareholder Bennamon – owned by Geminder who has an estimated personal fortune of $1.69bn – upwards of $15.5m.
The Federal Court earlier this month gave administrators the green light to accept up to $22.6m in funding from lender Scottish Pacific to keep the business running and protect staff wages while exploring restructuring or a potential sale.
The court also authorised the administrators to execute a separate deal with Kin Group, and extended the deadline for the second creditors’ meeting to May 20 next year.
Justice Beach said the funding arrangements were in creditors’ best interests and prevented immediate liquidation, adding that the six-month meeting extension would likely maximise returns for both secured and unsecured creditors.
Established in 1987, Pro-Pac was estimated to have 597 employees in 2024, according to IBISWorld.
Its website says it has numerous warehouses, distribution and manufacturing locations throughout Australia, New Zealand, Asia and Canada.
The business has faced years of deteriorating cash flow, with more than half the company’s share value – $4.36m – wiped in the past 12 months.
The business traded as high as $0.04 this time last year but closed at $0.02 on Sunday.
Pro-Pac’s first-half FY25 results saw revenue drop more than 10 per cent to $142.9m, citing a tightening market, unfavourable currency exchanges, and a sharp fall in sales to a key Middle East client, creating a $13.6m shortfall.
Current CEO Ian Shannon resigned as a director on October 10 but stayed on as chief executive, while company secretary Kathleen Forbes stepped down on October 21.
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