Beleaguered mill attracts buyers

A Waimate sawmill in receivership has fetched more than 20 expressions of interest since it was put up for sale.

Hunter Hills Lumber, a $10 million plant that opened in 2003, went into receivership on October 29.

Two weeks later, 38 workers were laid off as forestry company Blakely Pacific, which owns and manages 23,467 hectares in the South Island, stopped its supply of logs to Hunter Hills Lumber.

Blakely Pacific South Island manager Andrew Cocking said the supply was stopped because the mill owed the company a "significant amount".

Despite this, the sawmill remained on the market. Expressions of interest closed yesterday and the receiver, BDO Christchurch, has called for offers by December 1. Joint receiver and manager Colin Gower said they were working with the interested parties.

"We consider this level of response to be very positive. I am not in a position to comment on whether we have received any offers ... We would be looking to complete any sale as soon as possible, although we will be flexible if we can achieve a sale of the business and assets as a going concern and preserve value for all stakeholders, including employees," he said.

"We have not discounted any options in respect of the mill."

Mr Gower said prospective buyers could make an offer based on "their own due diligence" but he could not say whether the sawmill would be sold for as much as it cost to build, as that was commercially sensitive.

In May 2002 Hunter Hills Lumber received a $500,000 loan from the Waimate District Council, a move that was opposed by some ratepayers – so much so that they formed the Citizens Action Group.

However, the loan went ahead with an interest rate of 7 per cent. The money was to be paid in five years or if the council chose it could be turned into shares.

Council chief executive Tony Alden said in October the amount had originally been in shares, but in June 2007 it was converted into a loan.

When Hunter Hills Lumber went into receivership, it owed the council $344,000 from the loan and $50,000 from a trading debt.

The Herald reported two weeks ago that Waimate Timber, the opposition company, was considering buying Hunter Hills Lumber and its 14ha site in Manchesters Rd.

However, Mr Gower said yesterday he could not say who the interested parties were due to confidentiality issues.

At the time it went into receivership Hunter Hills Lumber's general manager was Dave Sanderson. The directors were Alistair McLaughlin, of Christchurch, and Robin Murphy and Gary Rooney, of Waimate.