The administrator of Forest Enterprises Australia Limited (FEA) has applied to the Federal Court for loan extensions on behalf of investors in the embattled agribusiness group.
BRI Ferrier principal Brian Silvia lodged a request with the Victorian Federal Court yesterday on behalf of investors in FEA managed investment schemes (MIS).
The extension comes as investors find themselves faced with financial difficulty, a BRI Ferrier spokesperson said.
BRI Ferrier informed FEA creditors of its intention to request extensions in its first report to creditors dated 16 April.
The firm said it would seek an extension in respect to the “decision period”, relating to property lease payments of $4.5 million and agreements between FEA subsidiary, FEA Plantations, and individual investor growers.
“The banks in appointing a receiver are obviously concerned to secure repayments of debts owing to them of more than $200 million. This is separate to financing, which we understand CBA [Commonwealth Bank of Australia] may have provided to some growers in respect to their initial investment,” the report said.
“The banks through their receiver will develop a realisation strategy for the group’s assets, where some of them may be capable of being sold off separately without impact on remaining assets.”
FEA Plantations is largely without funds to continue to manage the forestry operations, the report said.
“The financial interests of growers and group creditors are intrinsically linked, where a loss in investment for growers has the capacity to result in substantial damages claims against FEA Plantations with the potential to further impact the group,” it said.
Meanwhile, the chief executive of FEA has stepped down on the advice of the group’s receivers.
FEA company executive and one of the company’s founders, Tony Cannon, and FEA non-executive director David Taylor have also left the firm.
The first FEA creditors meeting will be held on 27 April.
