Buyers of the Hansells Masterton business keep staff and maintain operations. Photo / Lynda Feringa
Buyers of the Hansells Masterton business keep staff and maintain operations. Photo / Lynda Feringa
Food manufacturer Hansells Masterton owes more than $10 million to staff, ANZ Bank and the Inland Revenue, among other creditors.
BDO’s Andrew McKay and Rees Logan have released their first receivers’ report, detailing the company’s financial situation.
The “iconic New Zealand brand that’s been in Kiwi kitchens for 75 years”was put in receivership in April after it defaulted on a loan to Walter & Wild – a company linked to rich-lister Graeme Hart and his son Harry Hart.
Receivers subsequently agreed to sell the business and its assets to a subsidiary of Walter & Wild – Hansells Acquisition Limited – for an undisclosed sum.
Hansells’ products include Thriftee juice concentrates, soup mix brand King, liquid sweetener Sucaryl and common pantry items like vanilla essence, tartaric acid, black pepper and curry powder.
According to the receivers’ report, Hansells Masterton had traded poorly in recent times and was impacted by high material prices and labour costs over an extended period of time.
These issues were compounded by challenges assessing its pricing and product profitability in the market.
The business became loss-making and faced cashflow challenges, including being placed on stop credit with a number of suppliers and accruing arrears with the Inland Revenue.
McKay and Logan explained they considered several indicative offers from potential buyers, before agreeing to sell the business to the subsidiary of Walter & Wild.
Hansells Masterton’s former owner and director Alan Stewart hoped the business was sold for a fair price.
“I hope that the price obtained for the sale of the business was in excess of the amount indicated as total liabilities, as the value of assets was far in excess of that amount,” Stewart said.
“I heard there was a much higher offer that the receiver declined to allow them to visit and to look at the business.”
Alan Stewart, former owner and sole director of Hansells Masterton, said he hoped the sale price was more than the business' outstanding liabilities.
Millions owed
According to the receivers’ report, Hansells Masterton has liabilities of $10.87m.
ANZ Bank is owed $1.82m under a first-ranking general security agreement. The amount continues to accrue interest and charges.
The largest amount owed is to Walter & Wild, which is due $4m under a second-ranking general security agreement as part of a vendor financing arrangement. Interest and charges also continue to accrue on this debt.
A further $707,570 is owed to other secured creditors, including Fletcher Steel, Chelsea Sugar and Ricoh Finance.
The current amount owed to secured creditors totals $6.56m. However, receivers expect more claims to be made.
As for preferential creditors, $1.32m is owed to employees relating to outstanding annual leave, holiday pay and any estimated redundancy entitlements.
Inland Revenue is owed $1.79m, the majority of which relates to unpaid PAYE.
There is also $5500 owed to New Zealand Customs.
The current amount owed to preferential creditors totals $3.11m.
As for unsecured creditors, $1.23m is owed, including to trade creditors and Inland Revenue for interests and penalties totalling $250,000.
McKay and Logan confirmed they are yet to receive creditor confirmations from a number of creditors.
McKay and Logan said they cut staff and improved production efficiency, manufacturing scheduling and production run times when the company went into receivership.
They didn’t include the sale price and value of specific assets in their report, because this would “materially prejudice the exercise” of their functions.
Walter & Wild confirmed everyone employed when it bought the business had been offered roles under the new ownership structure, with operations expected to continue without any interruption.
Stewart said he was “very pleased” the business would continue to operate in Masterton.
“That is the reason I got back involved 11 years ago and have worked hard to keeping it going and invested all my money to support it,” he said.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
