BANKERS are likely to appoint receivers to the failed agriculture investment group Great Southern within the next couple of days as they seek to protect and ultimately recover $826 million of loans.
The company's lenders are closely monitoring the ASX-listed company's debt position. Great Southern called in voluntary administrators over the weekend when management failed to secure its financial future and in effect provide a guarantee that it could repay its investors.
Two separate syndicates of banks are involved in the company's collapse; one which lent money to Great Southern itself and a second that also helped to fund the responsible entity, Great Southern Managers Limited, which oversaw the group's forestry, olive, viticultural and almond projects.
The main syndicate is understood to include ANZ, the Commonwealth Bank and its recently acquired subsidiary BankWest, and the Japanese lender Mizuho.
ANZ is also part of the second group of lenders that is made up of the Singaporean bank United Overseas, GE Capital and Bank of Scotland International.
According to Great Southern Limited's last annual account, the company had long-term outstanding debt of $785 million, with a further $33 million said to be in the form of a securitised loan. It was due to make a $105 million payment to its bankers in October.
Neither ANZ nor the Commonwealth made a statement to the ASX yesterday declaring that they had major exposures to Great Southern that would require them to make further provisions for bad debts associated with the company's collapse.
The Herald understands the banks have been involved in the management's plans to restructure operations since the middle of last year when it emerged it had to cut its reliance on the tax advantage managed investment schemes that eventually brought it down.
But it became apparent yesterday that Great Southern's lenders began to lose confidence at the start of this month. That led to its shares being placed in a trading halt at just 12c 12 days ago. They were suspended from trading four days later.
"The directors have been left with no alternative but to take this sad and disappointing course of action after the group's banks declined to continue to support the restructuring program," said the chief executive, Cameron Rhodes, after the appointment of Ferrier Hodgson as voluntary administrators.
It will now be Ferrier's job to unravel Great Southern's complex financial and asset structure. Its forestry division owns 240,00 hectares, and it has 150,000 cattle on another 1.5 million hectares of owned and leased land.
These, in turn, were used by the company to offer 45 different managed investment schemes to 43,000 investors who could claim tax breaks on their investments. Great Southern charged management fees to run each of the schemes.
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