another mis provider collapses

http://www.abc.net.au/rural/regions/content/201005/2902431.htm?site=northqld

Another MIS provider collapses
Adam Stephen

Another Managed Investment Scheme provider has fallen over, causing anxiety in regional communities from Mareeba to Caboolture.

The Rewards Group managed 12,000 hectares of forestry and fruit plantations in Queensland, Western Australia and Victoria.

It was Australia's largest teak forestry grower and also ran many other schemes for the likes of mangoes, berries, grapefruit and stone fruit.

Rewards ran into financial difficulties late last year when it wasn't able to pay rent to the Ark Fund.

Ark Fund is a publicly listed company that owns the land where the Rewards schemes operate.

Rewards and Ark were trying to raise $55 million to pay down bank debt and merge their businesses.

But Rewards announced on Sunday it's run out of working capital and has had to call in the voluntary administrators Ferrier Hodgson.

MIS analyst Shane Kelly says it's another dark day for the sector.

"It really came down to the impact of the global financial crisis and the effect that's had on their balance sheet."

"They needed to raise money to sure up their balance sheet and ensure they had sufficient funds to run the projects going forward."

"At the death it appears the funds didn't eventuate and the projects had to be put into administration."

"(From here) It can go two ways."

"The worst outcome is that the administrators look to wind up the projects and sell the land as cleared title, which means the investors in the projects would be effectively giving away their project interests."

"A good outcome would be a similar outcome that has occurred for Timbercorp mangoes or avocados where new responsible entities came in to replace Timbercorp, as they would Rewards, that allowed those projects to continue on in the manner to which the investors invested," Mr Kelly says.

The collapse of Rewards will no doubt cause short term job losses in regional communities around Australia.

But Mr Kelly says it's likely jobs will again become available as the projects are either taken over by a new responsible entity or sold to a new owner.

"We've got very good agricultural assets that will find a home."

"It will either be that someone comes in and continues to manage the projects in the way they've been managed in the past, albeit at a much lower cost, given the Rewards Group won't be sitting in the middle."

"Or they'll be sold to another entity who will continue to run them in the same manner that they are run now."

"There'll still be employment opportunities whether it be to run the orchards, or pack the fruit or market the fruit, " Mr Kelly says.

Ferrier Hodgson has been appointed as the Voluntary Administrators and they have some information regarding the process from here for Rewards investors and creditors.

You'll find it on their website at www.ferrierhodgson.com