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High debt levels and insufficient working capital have pushed one of Australia's leading fresh produce suppliers to Australian supermarkets, Southern Cross Produce, into administration.
Sydney Markets-based Southern Cross has appointed Jirsch Sutherland partners Andrew Spring and Melissa Lau as voluntary administrators with the first creditors' meeting expected to be held on 16 May.
Spring and Lau are currently undertaking an extensive investigation into the financial affairs of the company, with hopes that a viable proposal for a Deed of Company Arrangement (DOCA) will be received.
"High levels of debt coupled with insufficient working capital are hindering the business from operating profitably. The director is looking for an external injection of funds to recapitalise the business," says Lau.
Spring says the moratorium provided by the voluntary administration provides an opportunity for the business to reset.
"It is hoped that effective communication with the key stakeholders, such as employees, customers, growers and financiers, will allow each party to work together to find a solution to the current financial circumstances," Spring says.
Southern Cross farms was established in 1990 and the company's website lists five farms in its portfolio located in New South Wales, South Australia and Queensland.
Three of these produce tomatoes - a 4ha glasshouse in Griffith, NSW, a 2ha glasshouse in Taree, NSW, and Satcco SA north of Adelaide - incorporating advanced technology from the cultivation itself through to packing and storage.
Southern Cross also has a 115ha mixed-use tropical fruit farm at Mareeba in Far North Queensland, with its website highlighting the production of longans, as well as 38ha citrus and wine grape farm in Nericon, NSW, northwest of Wagga Wagga.
A spokesperson for the administrators says the Southern Cross group has around 20 staff, while the administration itself applies to seven entities: Southern Cross Produce Melbourne, Southern Cross Produce Farming, Southern Cross Produce Wholesale, Southern Cross Produce (Sydney), Southern Cross Holdings (Aust), King Choi, and Wang Family Investments.
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