11 Nov 2009

Cedenco continuing to operate in receivership

9:11 am on 11 November 2009

Auckland-based Cedenco Foods has been placed in receivership by its bank, ANZ National.

The company employs 88 full-time staff in New Zealand and a peak of about 400 seasonal workers. It has vegetable and fruit processing factories in Gisborne and Hastings, and also operates in the Australian state of Victoria.

Receiver KordaMentha says there has been a breakdown of governance and ownership issues at the company.

The receiver says ANZ National has indicated it is prepared to keep the business going until a buyer is found.

ANZ National issued a statement saying it has committed to seasonal funding to allow Cedenco to purchase crops, in recognition of the importance of Cedenco to the Gisborne and Hawke's Bay communities.

The accountant appointed to handle the receivership, Brendon Gibson, says the ANZ bank has guaranteed funds to allow the business to continue operating.

He says the bank has set aside millions of dollars to make sure it's business as usual for crops harvested early next year, but the repayment of money to creditors is another issue.

Mr Gibson says the intention is to sell the New Zealand and Australian operations separately.

He does not expect job losses in the short-term, saying he expects all the staff and seasonal workers to keep their jobs.

Earlier announcement

US-owned Cedenco Foods announced earlier this year that it would not re-open one of its factories in Gisborne next year.

The company was started by brothers Cedric and Dean Witters, and began processing tomatoes on a large scale in Gisborne in 1986.

Cedenco's three Australian subsidiaries are also in receivership, and have also received funding from ANZ.

Mr Gibson says the businesses in New Zealand and Australia have been operated quite separately from the parent company.

Cedenco produces vegetable pastes, powders and purees along with quick frozen vegetables for export.