Saunders vague on Odenberg

Press, 25 January 1989, Page 26

Saunders vague on Odenberg

The effects of the receivership of Odenberg Industries New Zealand on its parent company, R. W. Saunders, was indeterminate at this time.

The chairman of R. W. Saunders, Mr O. F. Tailentire, said that the directors believed that the actions by the receivers were positive. DFC Financial Services appointed receivers for Odenberg, a significant trading subsidiary of R. W. Saunders, on December 9. Odenberg’s had suffered from poor returns from the U.S. subsidiary, Silver Fern, Inc., because of reduced sales, high exchange rates, and high interest rates on borrowings. The receivers had indicated that they intended to trade on with the company until they could evaluate the forward position, Mr Tailentire said.

The company was con-

tinuing to make and sell “Silver Fern” products to Silver Fern, Inc., for the U.S. market.

In their report to shareholders, the auditors said that the financial statements of R. W. Saunders and the group had been prepared on a going concern basis, the validity of which was dependent on the continuing support of financiers. Should the continuing support of financiers not be provided, and because of the uncertainty about the outcome of the receivership of Odenberg, the going concern basis might be invalid and provisions might be required for possible losses on realising group assets.

Mr Tallentire said that the company’s main objectives were the return to profitability and the reduction in debt.

This year would not be easy for the company, but early trading indications

were positive. There were other factors which were more favourable, including reduced interest rates, lower inflation, and a falling exchange rate.

The directors believed that the objectives could be achieved with the help of the company’s financiers.

Since the June 30 balance date a new company had been formed with the kiwifruit venture partner in North Auckland to include a market garden and nursery not previously part of the company’s investment. Saunders would own two-thirds of the new company.

Budgets showed that while kiwifruit and marketing would be marginal, profits should come from the nursery, market garden and persimmons. Trading by the combined venture in the first three months had been satisfactory and ahead of budget.