NSW Grain Company Collapses30-Jun-2014

ANOTHER grain company has collapsed as the impact of bad debts creates a domino ¬effect on the industry.

Tamworth-based LGL Commodities, which was an unsecured creditor of insolvent grain traders Sapphire (SA) Pty Ltd and Convector Grain, went into administration last week. Convector failed last year, owing about 240 creditors more than $15 million, while Sapphire, which was an ¬unsecured creditor of Convector, collapsed in March with losses of about $13 million.

According to Australian ¬Securities and Investments Commission documents an external administrator was ¬appointed to LGL Commodities Pty Ltd last Tuesday.

Andrew Yeo, of Melbourne auditing and accounting firm Pitcher Partners, is listed as the administrator of the company but did not return calls before deadline.

LGL Commodities lost money in the Sapphire and Convector Grain collapses.

Previously its managing director, Michael Long, had been vocal in calling for an investigation into Convector.

And it comes amid the failure of Gippsland stock feed company Gippsland Mills last month which trades as Meeniyan Stockfeeds and Cornells Prime Stock Feeds.

According to a creditor list seen by The Weekly Times, the company owes about $2.1 million to secured and unsecured creditors.
About 80 unsecured creditors are owed $1.37 million, with grain broker AgFarm the largest unsecured creditor.

AgFarm is part-owned by RuralCo and US farmer-owned co-operative CHS Inc, and previously had a commercial arrangement with the Victorian Farmers Federation. According to a VFF spokesman, this commercial relationship no longer exists but AgFarm remains one of its sponsors.

At least two companies on the unsecured creditors list were caught in the Sapphire collapse — Freemans Transport, of Bakery Hill, and Mallon Commodity Brokering.

Other unsecured creditors include Langdon Grain Logistics, of Lismore, Booth Produce, of Wangaratta, Rabar Pty Ltd, of Echuca, and Williams Agriculture, of Stoneleigh.

VFF grains president Brett Hosking, who has called for grain trading companies to be registered, said the lobby group recently sought legal advice for two Sapphire creditors.

And they are looking at putting together a brief of evidence for ASIC regarding the Sapphire case.

NSW Nationals Senator John Williams met ASIC officials in Canberra earlier this month requesting it investigate Sapphire after “a number of complaints” to his office.

It is believed ASIC is seeking further ¬information.

Weekly Times Now

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