Cumminscorp wants to delay creditor paymentShannon Willoughby...

Cumminscorp wants to delay creditor paymentShannon Willoughby

November 8th, 2008

CUMMINSCORP hopes to defer a deed-of-arrangement payment and use the funds for a new business venture involving the production of its C-boxes.

The water tank and aquaculture group, which has been operating under a deed-of-arrangement after moving out of voluntary administration two years ago, wants to defer the second-last payment to its creditors.

Already the payment is more than a month late.

The listed group wants to use the funds to enter into an agreement with another company to produce and sell its C-boxes, a fish-breeding device.

Cumminscorp non-executive director John Rivett said the venture, already the subject of a memorandum of understanding, would be profitable for the company.

He said the company had the backing of the deed-of-arrangement manager, Gerry Collins of PKF Chartered Accountants.

He also said Mr Collins was 'in the process' of drafting a letter to send to creditors who will vote on the proposal.

"We need the money to expand," said Mr Rivett.

"We have put forward a proposition to Gerry and he has accepted that we should put it to the creditors.

"We have got a good business opportunity which we want to take advantage of because it should give us a lot of profits.

"We are making a submission to extend the deed-of-arrangement for good business reasons."

Mr Rivett said Mr Collins would soon inform the creditors who would then vote on it.

"It is up to them to vote on it, but the proposition is pretty encouraging," he said.

"What we will be doing is producing the C-boxes and selling them.

"We have entered into a transaction with a company which wants to roll them out to a number of different locations and it is very much in our interest to take advantage of this right now."

He said the agreement meant Cumminscorp would produce and sell the C-boxes to the unnamed company and the pair would share the profit from the on-sale.

The deed-of-arrangement payment was due on September 30. The final payment is scheduled for late January.

Cumminscorp was founded by Ian Cummins who left the board this year, bound for China. He retains a 50 per cent shareholding in the group.

The group moved into administration shortly after listing. It began operating under the deed in April 2006.

Its shares remain suspended at 6c.

After a $2 million capital-raising last year, the company has turned its attention to its original water-remediation and aquaculture business.

The Gold Coast group recently spilt its operations, with its water-tank arm moving to Adelaide where there was more demand.