Agribusiness firm Elders Forestry (Elders) has moved to write down the remaining value of its shareholding in Forest Enterprises Australia (FEA) after voluntary administrators were appointed to the company.
Elders informed the market yesterday of its plans to write down the value of its shareholding in FEA to zero.
Yesterday's write-down comes less than a month after Elders announced that its 13.5 per cent FEA shareholding had previously been written down to equity value by a $26.7 million adjustment.
The write-downs will be recognised as a $32.4 million non-recurring item in Elders' accounts for the six months to 31 March 2010, a company statement said.
FEA's announcement reflects circumstances specific to FEA and does not directly relate to Elders, Elders chief executive Malcolm Jackman said.
"Elders Forestry is an entirely different proposition. Elders has completed its refinance, recapitalised its balance sheet and reduced debt," Jackman said.
"We have exited timber processing and have negligible grower loans on our balance sheet, with our growers overwhelmingly having been financed through external bank facilities."
Fellow FEA shareholder, Professional Investment Services (PIS), was unavailable to comment on whether its decision last week to cease approving agribusiness projects for the 2009/10 financial year was related to FEA.
"After consultation with the PIS Adviser Council and a selection of senior practices, PIS believes the industry is in a transition phase and until the confidence of the financial and investor community has returned we are not in a position to recommend the sector as an investment option," a PIS group statement said.
BRI Ferrier was appointed voluntary administrator of the following FEA entities: Forest Enterprises Australia Limited, FEA Plantations Limited, Tasmanian Plantation Pty Ltd and FEA Carbon Pty Ltd.
BRI Ferrier was appointed after FEA's financiers, Commonwealth Bank of Australia and Australia and New Zealand Banking Group, gave formal notice to FEA regarding defaults on loans.
