Great Southern Funds Management attempted buy-out underway
The management team of Great Southern Funds Management (GSFM) has launched a buy-out to take ownership of the company back from Great Southern Ltd.
GSFM director David Bryant told Money Management the management team of GSFM had made an offer to Ferrier Hodgson — the receivers of the parent company, Great Southern.
“Myself and the management team have made an offer to buy the business back and we are waiting to see if that offer will be accepted,” he said.
“We understand the receiver will want to maximise the investment in the business, but we believe our team has the expertise to run the agribusiness operation and deliver value for investors.”
Bryant was one of the founders of Rural Funds Management (RFM) in Canberra in 1997, creating a number of agribusiness investment vehicles. RFM was then sold to Great Southern Ltd, and now the same team that founded RFM want to buy back the original company.
RFM was sold to Great Southern in July 2007, with the now failed agribusiness manager taking 100 per cent control. But while GSFM is owned by Great Southern, it is not in administration and continues to operate and trade as normal.
Bryant said all the agribusiness operations are continuing and there was money in the bank to fund the businesses.
“We still have a lot of cash in the entity and all the trusts are still running,” he said.
“We are confident at this stage that we can keep everything running, but of course we cannot be completely certain.
“Our bank is watching our situation closely but is supportive of the operation and our proposal.”
Bryant said the management team had made an offer to buy the business back before Great Southern collapsed.
“We had made a formal offer to the board and the offer had been approved by the directors (of Great Southern),” he said.
“We were completing the documentation by the Monday when Great Southern went into administration on the Saturday.”
The funds in the Great Southern operation are not in a managed investment scheme, but unit trusts. The trusts have invested in a diversified range of agricultural products including cotton, vineyards, chickens and flower growing.
Bryant believes there are still good opportunities in agribusiness investment, particularly using the unit trust model.
“With a number of managed investment scheme operators failing, there will be opportunities to buy good agribusiness operations,” he said.
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