Advisers called in to review ailing Willmott BEN BUTLER July 26, 2010 .Ads by Google CORPORATE advisers Korda Mentha have been called in to agribusiness group Willmott after investors shunned its latest managed investment scheme (MIS).
Willmott, which controls more than $400 million of investors' funds, has been suspended from the stock exchange for three weeks after announcing it was considering selling off ''non-core assets'' to reduce debt.
A combination of the global financial crisis and an Australian Taxation Office crackdown has decimated the MIS industry during the past two years, with Timbercorp, Great Southern, Forest Enterprises Australia and Environinvest collapsing. Willmott has also been under pressure, with applications for its Premium Forestry Blend MIS slumping this year. The company's secured creditors, the Commonwealth Bank and St George, are believed to be owed about $90 million, with the CBA taking the lion's share.
It is believed the company is not in breach of its loan agreements.
Willmott directors are believed to have asked professionals from Korda Mentha to prepare a review of the company, which will be provided to its bankers. In addition to its well-known insolvency practice, Korda Mentha provides corporate advisory services through its offshoot 333 Capital.
Chief executive Marcus Derham could not be reached for comment, but in a July 5 statement to the stock exchange the company said it needed time to ''undertake a detailed review of the company''.
It planned to cut costs and was considering ''divestment of non-core assets and significant debt reduction'', if its financiers consented, the company told the ASX.
Four days earlier the company told the ASX applications for the 2010 Premium Forestry Blend MIS were $19.65 million, ''significantly lower than the company's expectations and materially lower than financial year 2009''.
The shortfall was ''largely due to uncertainty within the broader investment market beyond the control of Willmott Forests'', the company said.
While most forestry groups that have run into trouble are heavily invested in eucalypt plantations, Willmott concentrates on pine.
It has about 53,000 hectares of plantations.
The company made a profit for the six months ending on December 31, 2009, of $9.2 million, up 130 per cent on the $4.2 million recorded for same period in the previous year. Company documents show that in March last year Willmott negotiated a $135 million debt syndication with the CBA and St George.
Source: The Age
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