Failed shipping group owes $31m

MATT NIPPERT
Last updated 08:24 13/02/2013

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Collapsed Pacific shipping business Reef Group, whose shareholders include All Black great Michael Jones, owes $31 million and unsecured creditors look likely to suffer losses.

The Reef Group, comprising 37 companies in New Zealand, Samoa and the Cook Islands, had receivers appointed by ANZ Bank on November 26.

The first receivers report prepared by Colin McCloy and David Bridgeman of PricewaterhouseCoopers said $27.7m was owed to ANZ, $500,000 to Inland Revenue, $218,000 to employees, an unknown sum to other secured creditors and at least $2.5m to unsecured creditors.

McCloy and Bridgeman said unsecured creditors were likely to face a shortfall.

The group's major asset, the shipping business, was sold to NYSE-listed Matson Inc in a deal finalised on January 11. Matson said in a statement the purchase price was US$9.6m (NZ$11.5m).

"While the purchase itself is relatively small, it complements our growing network of Pacific island services," Matson chief executive Matt Cox said at the time the deal was announced.

It is understood ANZ's security agreement covers more than the companies in receivership and that further recovery action is underway.

The sale to Matson leaves only the husk of Reef's business left for receivers to realise - principally two fishing vessels and a noni juice business based in Niue and Samoa.

McCloy said the fishing boats were unlikely to fetch a substantial sum. "In the grand scheme of things, they're not worth a lot of money. They're quite old," he said.

The noni juice business is also distressed after running into trouble when its plans to sell into the Chinese market were scuppered following Reef's partner, Natural Dairy, facing allegations of corruption.

Natural Dairy principal Jack Chen has had his assets frozen after being charged with corruption and bribery by Hong Kong authorities over an unsuccessful bid to buy the Crafar farms.

Michael Jones, who has a one percent shareholding in the Reef Group, said last year the corruption case had effectively frozen the noni juice trade to China: "Unfortunately, for the meantime at least, events have overtaken that contract in a most unexpected way,"' he said.

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- BusinessDay.co.nz

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