VICTORIAN small stock processor Cedar Meats has moved to dispel concerns its business would be disrupted by delays in finalising a new corporate structure deal.
Sheep Central was told today that the company is trying to finalise the corporatisation of its structure within the new parent entity Global Meat Exports, a subsidiary of the unlisted public company AustAgri Group Limited.
The GME deal to transition the Brooklyn-based sheep, lamb, veal and goat processor into a $300 million ‘paddock-to-plate’ conglomerate with intentions to list on the Australian Stock Exchange was first announced in October last year.
However, as first reported in The Weekly Times, Cedar Meats today confirmed that the GME deal has not been finalised and that with the full support of the Kairouz family, the first mortgagee on the GME deal, Jasper Nominees Limited, has appointed receiver Laurie Fitzgerald, of William Buck, to take control of GME’s bank accounts.
Cedar Meats has not gone into administration and it’s important to note that Mr Fitzgerald’s remit is on the bank accounts only, the company said.
The Cedar Meats statement said GME has bought the business, but the Kairouz family still owned all the properties on which Cedar Meats operated its abattoir in Brooklyn and the freezer store in nearby West Footscray.
GME has not completed all obligations under the contractual agreements and, if these are not met, the business will ultimately revert back to the family, the Cedar Meats statement said.
“The only problems we’ve experienced with Global Meat Exports is that they have acquired the business, but haven’t completely executed all their obligations under the acquisition,” Cedar Meats chief of operations Tony Kairouz said.
“We are working with the first mortgagee (Jasper Nominees) to complete the transition obligations or the business reverts back to a family operation.”
Mr Kairouz said the move to control the bank accounts was complex.
“What the dispute here is that GME has certain priorities for what payments should be made and Cedar Meats and the family have certain priorities.
“What we are doing here is not allowing either party to use their discretion, but rather entrusting an independent person to assess the validity of the expenses and paying them on the business behalf until the transition is fully executed,” he said.
“It’s got nothing to do with the performance of the business.”
Under the GME deal, the Cedar Meats business was to have remained family operated with Pierre Kairouz as the chief executive officer and Tony Kairouz as the chief of operations, with the pair maintaining substantial ownership and control in the new corporate structure.
Last year Tony Kairouz said the corporate transition would enable non-participating and retiring family shareholders to depart the business.
Cedar Meats was established in 1984 by six Kairouz brothers as a butcher shop in suburban Northcote, Victoria, and has since grown to a fully integrated, export meat processing facility processing lambs, sheep, calves and goats in Brooklyn, Victoria. The business has employed up to 300 people with a turnover of more than $200 million per annum.
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