Plantation giant Timbercorp faces an uncertain future after it failed to sell assets to raise money for debt repayment.
Timbercorp has drawn on $562.9 million of loans from syndicated and bilateral facilities, with payments of $10 million due on May 1, 2009, and further repayments due throughout 2009.
"Unless the company is able to reach agreement with its financiers to restructure the exisiting debt facilities, there is significant uncertainty regarding the ability of the company to continue as a going concern,'' the company wrote in a statement on its website today.
Timbercorp went into a trading halt on Tuesday, April 13, and shares fell to 7 cents when they resumed trading this morning. Timbercorp shares have lost 39pc of their value over the past year.
Last November, Timbercorp announced it would start an asset sale program to pay down debt.
However, today the company annouced the offers it received were "at values substantially below book value and are incomplete and condition in nature".
"The company is continuing the sale process but, based on the offers received to date it is unlikely that the company will be able to sell the forestry assets within the timeframe required.''
"Indeed, there can be no assurance that a sale will be achieved,'' the company stated.
Timbercorp was established in 1987 and listed on the stock exchange in 1996.
It manages large-scale farms across Australia, as managed investment schemes, and has 120,227 hectares of plantations.
It grows and sells almonds, olive oil, citrus, table grapes, mangoes, and avocados, and timber from eucalyptus plantations.
It has 180 employees and and is responsible for a further 1500 employees and contractors throughout regional Australia.
According to its website, Timbercorp had assets of $595.6 million in September last year.
An open day has been held at Timbercorp’s 2,777 hectare olive grove near the town of Boort in northern Victoria to celebrate the site being named Olive Grove of the Year by the Australian Olive Association.
The group's internet site says Timbercorp first began to establish the Boort olive grove around a decade ago and today it is one of the largest single site olive groves in the world, consisting of almost one million olive trees.
The grove and on-site olive oil processing plant are major employers in the local area and the open day was held as staff were gearing up for the annual olive harvest, which is due to commence around Easter.
This year it is expected that Timbercorp’s Boort grove will produce more than 3.5 million litres of olive oil in 2009, which equates to around one-third of total Australian olive oil crop.
Timbercorp’s Boort site was named Olive Grove of the Year in recognition of the investments the company had made in the latest technology and farm equipment to produce large volumes of high quality olive oil while maintaining cost competitiveness.
Oil produced at Boort is sold under the Cobram Estate label, which is managed by Boundary Bend, Timbercorp’s strategic alliance partner for its olive projects.
The Cobram Estate brand competes against the world's best at shows in Australia and around the world.
Last year, the brand won two trophies and 39 medals.
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