Fonterra to take those left in lurch

Dairy giant Fonterra says it expects to sign up most of the 27 farmers left without a milk processor by the receivership of the New Zealand Organic Dairy Farmers Co-operative.

Fonterra said half the farmers had asked to rejoin by last night, and three-quarters were expected to have signed up by the end of the week.

The troubled organic company said it had made arrangements for Fonterra or its privately owned rival Open Country Dairy to pick up the farmers' milk.

Receiver Andrew McKay, of Auckland's Corporate Finance, was called in last week. The receivership is yet to be announced on the Companies Office website."The directors informed the bank that we could not continue to trade," company chairman and Whakatane farmer Malcolm Campbell said.

The receivership was announced two weeks after the resignation of chief executive Patrick Geals following weeks of in-fighting between board members and farmers on whether to ask farmers or external investors for extra capital to try to solve the cashflow problems.

Mr Campbell, who is owed $100,000 in milk cheques by the co-operative, said settling with suppliers would have required outside money.

The receivers were called before a meeting this week with senior executives from Seoul Dairy, which may have been interested in investing in the company. "There was discussion on the potential for an investor," Mr Campbell said.

"However, we could not facilitate that."

- © Fairfax NZ News