credit payment delayed

Maybe there is a light at the end of the tunnel......

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Cumminscorp off the hook as creditors delay paymentShannon Willoughby

December 17th, 2008

CUMMINSCORP creditors have agreed to wait a further six months before they receive payments under a deed of arrangement, allowing the company to use the funds for further expansion.

Meanwhile, the water tank and hydroculture group, which has been operating under the deed of arrangement after moving out of voluntary administration two years ago, will meet an 'interested party' tomorrow about a private placement deal.

The company is facing immediate expansion, but needs fresh working capital to fund it.

The company, which also manufactures water tanks, appealed to creditors to be patient and allow it to take advantage of the opportunities.

Creditors agreed unanimously on the extension.

"We're confident we are making a profit and we are delighted creditors have given us some more time," said company chairman John Rivett.

"The mission now is to keep making a profit and to get some more capital into the company.

"We are negotiating with a number of people to take up some more shares in the company.

"We are trying to do a private placement without the deed of company arrangement to give us some working capital."

He said the group had three profitable centres in operation.

"One is at Yatala, which produces water tanks; the other is a joint venture in Adelaide with (company) Urbanviron, which also produces tanks. Both are doing well," he said.

"We are under pressure from the point of view of working capital to fund the costs of the resin and other things to produce the tanks.

"The third (arm of the company) is a joint venture which we have entered into with Rochdale Turf where we are growing commercial quantities of fish.

"At this stage it's silver perch, but we will move into eels and barramundi in the new year.

"We are wanting to develop that as a showpiece hydroculture park and the joint-venture partner wants to go ahead now.

"They have the town planning permit and their capital ready."

He said Cumminscorp would fund the labour and setting-up of C-boxes, where the fish are grown. As well as using the South Brisbane site as a showpiece, the joint-venture partners want to use the facility as a staff training centre, he said.

The first commercial crop is due mid-2009.

Mr Rivett said the company's overseas ventures also were progressing, with its Chinese partners recently ordering two C-boxes.

"We hope that will advance into that being a full-time hydroculture park. We are being pretty bullish about that," he said.

He said the water-remediation arm of the company was under the control of Ian Cummins, the founder of the group who now is employed at a consultancy level.

The creditors' next payment is due at the end of March.