Big vertical leafy greens grower for sale after falling short on profitable size

Greenleaf Fresh produced leafy greens, including lettuce, kale, rocket, herbs and microgreens for North Island retailers.

Failure to achieve profitable scale and raise more funds to achieve it led to the voluntary administration of New Zealand’s first large-scale vertical horticulture farming business, Greenleaf Fresh.

The first report of administrators Adele Hicks and David Ruscoe of Grant Thornton said the Hamilton company, which traded as Green Grower and supplied supermarkets and wholesale food services, also experienced delays with completing capital works to increase scale, with insufficient working capital to fund ongoing losses under a one-tunnel operation.

The company, founded in 2017, produced leafy greens for retailers and wholesalers in the food service sector, mainly in the North Island.

Products were distributed under supermarket brands such as Pam’s and Value, as well as the company’s own Green Grower brand, the report said.

The business is now for sale.

Vertical farming methods used 95% less water than conventional horticulture and the controlled indoor growing environment eliminated the need for pesticides and year-round production, the report said.

When the administrators were appointed on December 30, the company’s debtors had a book value of $510,000, with additional invoices raised since for produce delivered.

Unsecured creditors were owed around $2.2 million. The administrators expected that to increase. Some unsecured creditors may have a valid security interest over some assets, the report said.

Preferential creditors included 55 full and part-time staff, who were due around $229,000 in leave entitlements.

Inland Revenue was estimated to be owed $116,000 in PAYE arrears and a preferential amount, while Customs was thought to be due around $490,000.

Secured creditors, who include the Bank of New Zealand, had been contacted to provide amounts owed to them, the report said.

The company had around $664,000 in the bank.

The first meeting of creditors will be on January 14 in Hamilton.

The administrators said after their appointment, they visited the company’s Hamilton site for discussions with management to assess the best way forward for the company, but were unable to find a viable way to allow trading to continue while a buyer was sought.

Without funding, it was decided to close and sell the business as a whole.

This decision followed the directors’ preference for a voluntary administration over liquidation to allow an opportunity for restructuring with a deed of company arrangement. The hope had been a viable business could emerge if suitable funding could be found quickly.

Greenleaf Fresh’s directors are Malcolm Boyd, Matthew Crosby, Brendhan Greaney, Ian Holland, Samuel Mellor and Bruce Miller, Companies Office records show.

Its largest shareholder is the BK Portfolio, which owns 15.87% and whose underlying shareholders are Bruce and Kellie Miller, of Hamilton.

Marire Limited Partnership owns 15.64%, Warehouse Storage owns 11.72%, Perry Securities 10.94%, Ahikouka Holdings has 10.72% and Ian and Janine Holland own 7.49%.

Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the $26 billion dairy industry, agribusiness, exporting and the logistics sector and supply chains.