Investors out of pocket as MIS is placed in liquidation

Managed investment scheme (MIS) responsible entity Primary Yield Agricultural Investments has been placed in liquidation and receivership.

Investors or so-called ‘growers’ in Melbourne-based Primary Yield’s several MISs stand to lose all of an estimated $70 million in invested funds, much of this placed through advisers.

Commonwealth Bank and Adelaide Bank, which have both placed Primary Yield in receivership, stand to lose up to $45 million and $33 million respectively from the collapse.

At a meeting of creditors on October 24, in which Primary Yield was placed in liquidation, it was projected the shortfall owing to the banks could be as high as $100 million.

Several of the main companies of Primary Yield, which was established in 1997 as Environinvest, have been placed into receivership with KordaMentha by the Commonwealth Bank.

Adelaide Bank has appointed PPB as receivers over Primary Yield subsidiary Primary Yield Finance Prop, which securitised loans to scheme investors.

It will be at least two months before the receivers know what return (if any) scheme members may receive on their investment, according to liquidator Jim Downey of Melbourne-based firm P Downey & Co.

“Returns (if any) will most likely vary between schemes, as the assets and liabilities of each scheme are separately held and identified,” he told Money Management.

Primary Yield made headlines in July this year for launching legal action against the manager of its tomato-based MIS, Primary Yield Tomato Project.

It took the action against Costa Group, Australia’s largest fresh produce wholesaler, in order to “pressure it” to perform to the profit figures carried in the scheme’s Product Disclosure Statement issued to investors.

The seven-year project, which closed for investments on June 15 last year, grows high-value truss tomatoes in a 50,000 square metre state of the art glasshouse located at Guyra in Northern NSW.

Primary Yield was reportedly engaged with Ernst & Young to identify potential purchasers of some of its plantation property portfolio (which is valued in excess of $30 million).

At least one MIS distributor welcomed the sale of the MIS business in order to “provide sufficient capital ... to enable payment of commissions outstanding to advisers and clients”.

Growth Partnership Group chief executive Warren Jones, held a meeting with Primary Yield on June 16 to address a number of related issues.