Timbercorp's 2009 olive crop to go ahead
This year’s Timbercorp olive crop will be harvested after a deal was struck between the company’s administrator Korda Mentha and the harvesting company.
It is proposed Boundary Bend will harvest the olives, reportedly worth about $26 million, and be paid from the proceeds of the crop.
The administrator went to the Federal Court to prove the legality of using the harvest to pay for picking the olives, as Timbercorp has no cash.
It is estimated that the harvest will cost about $12 million, Mark Mentha, of administrators Korda Mentha, confirmed.
The investors argued in court they had already paid for the harvest, but the danger was that the crop would have been left to rot on the trees.
This could have reduced next year’s yield by up to 90 per cent.
However, while harvesting will now proceed, there is still considerable uncertainty of land ownership.
Timbercorp has 121,000 hectares of land around Australia planted with trees, olives, almonds, grapes, avocadoes and citrus fruit.
The company owns some of the land, but the rest is leased from farmers and organisations associated with Timbercorp.
Mentha said rents have been paid up to June 30, but after that the situation was unknown due to Timbercorp’s lack of cash in the bank.
“The land situation is quite complex,” he said.
“There is a seriously complex relationship with the investors and ownership of the land.
“Each [managed investment scheme] is different and there is no doubt that some of the schemes are not viable.”
Mentha confirmed the various trees and plants are actually owned by the investors, but the ground they were sitting on was not.
At the company's creditors' meeting, concern was raised about the banks owed money by Timbercorp seizing assets such as the plantations and crops.
Again Mentha confirmed the banks have no powers to seize investors' assets, but post July 1 he admitted that he did not know what would happen, as there is no cash to pay rents.
Farmers whose land is being leased also face uncertainty, as there will still be staff to pay and leased farming equipment to be financed.
If all the land is put up for sale by the owners to cover their costs, nobody is sure what would happen to land prices as the market would be swamped.
To complicate matters further, there are investors in some of the associated Timbercorp land trusts, which are not in administration, and they are facing uncertainty over their returns in the next financial year because Timbercorp probably won’t be paying rent.
Timbercorp has 18,500 investors who put $2 billion into 63 managed investment schemes.
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