NAB appoints receivers to Organic Dairy Farmers of Australia, Corio Bay Dairy Group structure to change
National Australia Bank has appointed receivers to Organic Dairy Farmers of Australia to protect its interest over loans provided to the dairy group.
NATIONAL Australia Bank appointed receivers and managers to Organic Dairy Farmers of Australia last Friday, just a week after the dairy group voluntarily installed administrators.
Documents filed with the Australian Securities and Investments Commission show NAB holds mortgages over property and goods held by Organic Dairy Farmers of Australia, plus security on a range of loans.
NAB appointed Sal Algeri and Tim Norman, of Deloitte Touche Tohmatsu, as joint receivers and managers to ODFA until the assets were sold or until the bank was paid out for the security it held over assets.
It is not clear how much the bank is owed by the North Geelong business.
ODFA’s directors appointed Ivan Glavas and Scott Andersen, of Worrells Solvency and Forensic Accountants, as administrators on May 15.
Mr Andersen said: “If there are any assets which fall outside the NAB charge, we have powers and obligations to deal with those assets.”
ODFA is owned by about 50 organic dairy farmers across Victoria and Tasmania.
They have the largest pool of organic milk in Australia.
ODFA converted a former fish processing plant in North Geelong to a milk receival and processing factory in 2015 to produce its True Organic brand of dairy products.
The organic milk processor also had a half share in the Corio Bay Dairy Group, a joint venture with Wattle Health Australia — which held a 45 per cent stake — and Niche Dairy Pty Ltd holding the remaining 5 per cent.
Corio Bay Dairy Group is building a spray dryer plant next-door to the ODFA factory.
Earlier this year, it was struggling to complete the plant, with sources saying a shortage of funding was an issue.
Wattle Health Australia recently secured commitments from Shepparton Partners Collective to help facilitate $20 million in debt funding to complete the spray dryer plant.
WHA said SPC would buy a 50.1 per cent stake in CBDG for a nominal dollar amount, replacing ODFA as the joint venture partner.
Mr Andersen said there had been a lot of interest in the ODFA assets.
“Unfortunately, the current circumstances of voluntary administration is going to have financial ramifications on many stakeholders,” he told The Weekly Times.
“We are speaking to various parties who want to discharge the bank’s debt so the receivers are no longer participants in the process and neither is the bank, and then at the same time putting up a deed of company arrangement which will essentially assist with providing some return to the unsecured creditors.
“The objective is to shore up the long-term viability and retain the milk pool … so the co-op can continue to be a participant for benefit of members and operate in the industry.”
Milk pick-up from farms would continue as normal, with all ODFA operations and employees also continuing.
Mr Norman did not return calls by The Weekly Times.
Wattle Health Australia chief executive Tony McKenna said on Friday the milk supply agreement between ODFA and CBDG was legally binding.
“We remain committed to development of a strong organic milk supply base and, despite the current challenges of ODFA, dairy farmers ill have the opportunity to supply their organic milk into our spray drying facility at CBDG,” Dr McKenna said.
The administrators are holding a meeting of creditors tomorrow.
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