Interfert, one of Australia’s largest fertilising importers and distributors, has collapsed into administration following a crash in fertiliser prices during the global financial crisis and a subsequent failure to secure a new funding arrangement with a controversial foreign lender.
But according to The Australian the Swiss firm Western Gulf Advisory was responsible for arranging funding but the money never materialised.
Interfert is part of a growing list of businesses which claim WGA has failed to come through with financing – many claim WGA is committing outright fraud.
The company posted a statement earlier this year denying such claims. This followed public accusations from New South Wales land developer Keith Johnson and a number of other executives regarding WGA’s activities, who say the company takes fees and yet does not deliver.
“Western Gulf Advisory Asset and Wealth Management, Western Gulf Advisory, based in Zug, Switzerland, and their founder and president Mr Ahsan Ali Syed strongly refute allegations about their businesses being propagated by the fraudsters,” it said earlier this year.
WGA was contacted this morning for comment but no reply was available before publication.
Interfert was also contacted this morning by SmartCompany, although questions were referred to KordaMentha. Partner Chris Powell was also unavailable before publication.
“Our current priority is to investigate a restructuring and refinancing of the businesses and to work to maintain supplies and services to existing customer across the group’s extensive rural network,” he said in a statement.
A creditor’s meeting will take place today in Adelaide. Both Intrafert and Megafert turnover about $100 million, although creditors – of which there are reportedly about 150 – are owed $25 million.
The directors of the business have said the global financial crisis – which saw fertiliser imports drop in price from $US1,280 to $US400 per tonne – meant markets “effectively froze”.
Combined with a plan to obtain funding that never came, Interfert and Megafert opted for voluntary administration.
“The board decided to place the trading entities of the Group in Voluntary Administration after it became apparent that an overseas provider of executed banking arrangements was unable to meet its commitment to Interfert and Megafert,” the directors said.
“Those funding arrangements, which failed to materialise, had included the fertiliser business establishing new banking facilities late in 2010. Funds were to be advanced in January in time for the 2011 fertiliser season.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
