Administrators recommend Mossman Mill goes into liquidation

With a critical meeting of creditors just seven days away, the administrator of the ailing Mossman Mill has recommended creditors put the companies into liquidation unless an eleventh-hour lifeline is offered.

Time may be up for the ailing Mossman Mill, with nobody coming forward to offer a financial lifeline.

Daintree Bio Precinct, the parent company of Far Northern Milling, was placed into administration on November 20 last year with 130 workers owed more than $1.2m in entitlements.

A report to creditors reveals it owes unsecured creditors – many of them Far North businesses – more than $1.12m, and it recommends winding up the company and liquidating its assets, with a meeting set for February 29.

Canegrower peak bodies have been calling on the state government to provide funding to enable the 2024 crush to go ahead but Agriculture Minister Mark Furner is yet to commit.

Happier days: Former Douglas Shire Mayor Julia Leu, Federal Member for Leichhardt Warren Entsch and former Far Northern Milling director Maryann Salvetti at the Mossman Mill.

Since 2012, Mossman Mill has received $25m in state government funding and $34.43m in federal funding, along with $250,000 from Douglas Shire ratepayers for growers to acquire the mill, which former owner Mackay Sugar planned to shut down.

A spokesman for Mr Furner said he recognised the significant impact the mill closure would have on Mossman and the government would work to support the community through a difficult time.

“The government’s response to these developments is under careful consideration and we hope to be in a position to announce that response next week,” he said.

Helmont Energy director Mark Jonker said it had worked at its own cost alongside Far North Milling for three years to develop the proposed renewable fuel project.

Far Northern Milling former directors, Rajinder Singh, Maryann Salvetti, Don Murday and Liza Giudice.

“The key project hurdles centre around the future of the Mossman Sugar Mill and the ability for the project to obtain an offtake agreement for the renewable fuel product,” he said.

Senator Nita Green said her first priority would be to ensure workers received their entitlements.

“They have slogged their guts out for the mill and that’s the least they deserve,” she said.

In the report, administrator John Goggin of Worrells said if there were insufficient funds for employees, the Fair Entitlements Guarantee (FEG) scheme could help – but assistance is only available if the company is placed into liquidation.

Growers have been subsidising the mill, paying a sustainability levy, and now fear their 2024 crop will not be crushed.

Mr Goggin said his focus had been sourcing funding for the mill to continue while a longer term solution was found.

He noted the directors – Donald Murday, Rajinder Singh and Gerard Puglisi, had sought state government help but the government was so far unwilling to further support the mill operation and was still considering its position.

He said the plan had been to transition away from raw sugar production and diversify to a high value biofuel producer and while talks had been held with Hemont Energy and Licella Holdings, neither was prepared to stump up funds.

Mr Goggin said he received an expression of interest from a company called Clever Power but he didn’t have enough information to make a recommendation on it.

Mossman sugar mill in far north Queensland went into administration on November 20 last year.

He said previous funding had gone on operational improvements, critical maintenance, capital expenditure and a business case assessment for related entity CocoNutZ Australia, which flopped.

Mr Goggin said as there were no proposals for a deed of company arrangement – an alternative form of administration which enables a company to restructure itself.

His recommendation was that creditors vote to wind up the companies.

“Having said that, I am in discussions with a number of parties who have submitted proposals that could translate in to a DOCA in time for next meeting,” he said in the report.

“Any such DOCA would need to provide a better return to creditors that the alternative liquidation scenario.”

Canegrowers Mossman chairman Matt Watson said there was a bleak future ahead without state government help.

Originally published as Administrators recommend Mossman Mill goes into liquidation