Administrators of South Australian food company Spring Gully Foods have handed the company back to its directors after 300 creditors of the company voted to accept a Deed of Company Arrangement (DOCA).
The company, which called in the administrators in April after suffering a sudden dip in supermarket sales, will resume operating under family control from first shift tomorrow.
Spring Gully owes unsecured creditors more than $3 million and has bank debt of around $7 million. The DOCA, which was signed today by Spring Gully's directors and the administrator, Austin Taylor of Meertens, will return them 100 cents in the dollar on outstanding debts, with an initial down payment and regular quarterly payments until the debt is finalised.
Since the news broke about its financial problems, Spring Gully has experienced unprecedented demand for its products, and its managing director, Kevin Webb, said he was humbled and grateful for the support of creditors, the public and major supermarket chains which had rallied behind the company after it entered voluntary administration.
“The support and goodwill we received from everyone has been overwhelming,” Webb said. “As soon as our situation became public, demand for our product went through the roof, resulting in us introducing a second shift in May to deal with the extra demand.”
According to Webb, this increased level of sales had been maintained and the company was confident that together with changes made internally, it now had a positive long-term future.
“My sincere thanks go to our creditors, who have maintained faith in our company, and to consumers across Australia, but especially in South Australia, who have supported us,” Webb said.
The administrator, Austin Taylor of Meertens, said any administration that resulted in creditors getting 100 cents in the dollar and the company being returned to its directors was a good result.
“This was without doubt one of the most unusual administrations I have been involved in given the high level of public support and involvement,” he said.
“It also underlines that administration need not be a one-way journey to liquidation, providing administrators are called in early enough.”
