Billionaire Graeme Hart and his son Harry bought Hansells Food Group for $15 million in their creation of a new local food empire.
Hansells' management started looking for a buyer in October last year and entered into a sale and purchase agreement on June 1 to sell the assets andliabilities for $15m, financial statements lodged with the Companies Office show. The Auckland-based company had accumulated losses of $66.5m by March 31 and was trading with negative equity of $28.4m.
The assets held for sale were valued at $39.9m as at March 31, including $14.1m of property, plant and equipment, $10.8m of inventories and $11.4m in receivables. The firm also came with $26.5m of liabilities, of which $5.8m was a loan from Scottish Pacific, $7.4m was in trade payables, and $5.2m were from related party payables. Discontinued businesses generated a positive operating cash flow of $2.4m in the year.
The food ingredients business was rolled into Water & Wild, an entity set up by the Harts in three separate deals to buy Hubbard Foods and the Gregg's sauce unit. Water & Wild is fronted by Harry Hart, who owns 33 per cent of the ultimate parent, and backed by Graeme Hart with 67 per cent.
Hansells has been a perennial underperformer, repeatedly filing accounts tagged by its auditor. The firm saw revenue drop to just $96m in the March 2018 year from $188m in 2013.
It reported a loss of $20.3m in the year ended March 31, compared to a loss of $6.8m a year earlier. That included an $11.6m charge writing off its remaining goodwill and $349,000 from the value of its brands, which include Hansells cooking ingredients, Thriftee drink concentrate, WeightWatchers foods, Alfa One rice bran oil, Vitafresh and Vitasport drinks.
Accounts of the Rotorua Energy Charitable Trust, a former 36 per cent Hubbards shareholder, show the cereal maker hadn't turned a profit since 2015. The trust wrote down its investment by $5.1m and fully impaired a $2.3m loan to the food maker in 2016 and 2017 before selling its stake back to Dick and Diana Hubbard.
The Gregg's sauce assets became available as a required divestment for the Commerce Commission to approve the sale of Cerebos Gregg's to HJ Heinz.
