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 Investors left in limbo by Great Southern 

Investors left in limbo by Great Southern

08 Jul, 2009 09:55 AM
MOST of Great Southern's managed investment schemes are expected to be insolvent without outside financial support, leaving their 43,000 investors dependent on the efforts of the failed group's receivers to find a new source of funding.

The running costs of the 45 schemes — ranging from timber plantations to fruit and nut products — are being covered from cash reserves secured by receiver McGrathNicol. But the grower investors were warned yesterday that the support was only a "temporary measure".

The financial crisis suffered by almost all of the schemes has been exacerbated by the dire plight of the failed agribusiness group's responsible entity, Great Southern Managers Australia Limited, which The Age revealed last month is insolvent.

Great Southern collapsed in mid-May, owing its bankers $600 million as well as putting at risk at least $1.8 billion raised from its grower investors.

They have been told in a letter sent out by receiver Simon Read this week that GSMAL has no money to complete any of the projects, but that "certain expenses" have been met to preserve the various horticultural assets for the time being.

However, Mr Read underlined the increasing uncertainty facing the schemes if no new sources of funding are made available. Such steps include the grower investors putting up more money.

"Investors should be under no illusion regarding the funding," he said. "It is an ad hoc, interim arrangement. It is not a solution to the solvency of the schemes."

Having taken control of Great Southern seven weeks ago, McGrathNicol is now starting to work out the viability of each scheme, but as yet does not have sufficient information to decide which projects might survive and those that will have to be wound up.

The receiver hopes to provide an initial view within a month. But there is no way that Great Southern's existing set-up can finance the gap in maintaining the projects and bringing them to harvest.

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03 July, 2009
POLL
Q: Many federal politicians are overseas on trade missions and study tours, during Parliament's winter recess. Is the cost to taxpayers justified?

Yes, the trips are worthwhile.
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Total Votes: 435
Poll Date: 06 July, 2009

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