Forestry jobs at risk
MORE THAN 100 forestry jobs on the Northern Rivers are on the line and hopes for the creation of 200 additional jobs have been dashed after Forest Enterprise Australia Plantations went into voluntary administration and receivers took over its parent company.
FEA Plantations, which is headquartered in Lismore and has about 29,000 hectares under plantation across the region, has a permanent staff of about 20, plus 40 contractors and 70-odd casuals,depending on the season.
The Tasmanian-based timber giant also had plans to build a processing mill at Kyogle that would have employed a further 200 workers.
Yesterday, Kyogle mayor Ross Brown remained hopeful something could be salvaged for the shire, which has about 7500 hectares under plantation.
“The assets are still here and sometime or other they will be sold to another player, who we hope will want to value-add (process timber) in our area,” he said.
Cr Brown said most of the local contractors had been laid off a couple of weeks ago when the company’s request for assistance from the Tasmanian Government wasrejected.
“I think it was pretty much inevitable after that,” Cr Brown said.
“But we aren’t going to throw our hands up in the air or neck ourselves. There are still a few players left so all is not lost.”
FEA went into voluntary administration late Wednesday, but in a series of fast-moving developments receivers yesterday moved in taking over all parts of the timber company, other than its 17 plantations.
The reason receivers were not appointed to the plantations is because they have about 1300 investors.
In a statement to the Stock Exchange, receivers Tim Norman and Sal Algeri said it would take some time to work through the complex company structure.
“While it is only early stages in the appointment, our priorities as receivers will be to understand the financial position of the companies we have been appointed over,” they said.
“Forestry involves complex legal structures with a number of stakeholders whose priorities need to be independently considered. We will be working to understand the financial prospects of these schemes.”
Administrators BRI Ferrier had hoped to put out a statement last night detailing how the process would work, with part of the company being wound up and part treated as an ongoing concern.
FEA had been struggling to refinance its $216 million debt, which became a significant liability last financial year after the company reported a large loss.
Its banks, ANZ and the Commonwealth, had given FEA numerous extensions to resolve its funding issue, but called time on the loan this week, forcing the company into voluntary administration.
FEA chairman Will Edwards accused the banks of forcing the company’s hand.
The banks have ‘placed the (FEA) board in an untenable position as it prevents the ability of the company to access the necessary funds to operate its normal business activities’, he said. “As such, the board has no option but to place the company in voluntary administration.”
The timber industry has been struggling since the global financial crisis erupted, also claiming the scalps of two dominate players – Great Southern and Timber Corp.