Rotorua sawmill in receivership

Friday 25 Oct 2013

Tachikawa Forest Products was placed into receivership late last week, which is being handled by Kordamentha. Tachikawa, the Rotorua sawmill is about 49 percent owned by Japan’s Tachikawa Forest Products and 38 percent by Sojitz Corp.

A report this week says that the mill was in breach of its banking covenants for the past two years, and had its 2012 accounts tagged by auditors over a working capital deficit.

KordaMentha’s Grant Graham and Brendon Gibson were appointed receivers on Friday, ending the Japanese-owned wood processor’s attempts to regain profitability after successive years of losses that had accumulated to NZ$12.5 million as at Dec. 31. The sawmiller narrowed its annual loss to NZ$3 million in 2012 from NZ$4.5 million a year earlier, though its working capital deficit widened to NZ$1.3 million from NZ$552,000 in 2011.

Financial statements lodged with the Companies Office show Tachikawa was in breach of its banking covenants in the 2011 and 2012 calendar years, and had reached an agreement with Bank of New Zealand to operate within a capped overdraft of NZ$1 million. BNZ was owed NZ$8.3 million as at the end of 2012, down from NZ$9.3 million a year earlier.

On Saturday, First Union general secretary Robert Reid, whose body represents about two- thirds of the 120 staff at the mill, said he understood Tachikawa was working towards returning to profitability, but ran out of working capital and wasn’t able to buy logs to meet its order book.

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