Border Timbers Apply for Judicial Management

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WOOD processing concern, Border Timbers, has filed for judicial management to ward off pressure from a major creditor.“Stakeholders are advised that as a result of one of its major creditors instituting legal proceedings, the company’s board of directors filed an application on January 5 2015 intending to place the company under provisional judicial management,” the company said in a statement on Friday.

It said over the past 12 months, the company had undergone a comprehensive restructuring exercise, the benefits of which were now being seen in lower production costs.

The company said this has helped to offset declining unit selling prices which have been occasioned by the state of the domestic economy and the decline of the South African rand.

“The board believes that the company now needs to address its financing arrangements with regards to both cost and tenor and that this will be best achieved under the protection of judicial management.

“The board believes that Border, with suitable financing in place, remains a viable operation and will return to profitability if given an opportunity to do so. Recent results have shown that before finance costs the company is generating positive cash flow.

The company, however, said the board was mindful of its responsibility towards the company’s 1 700 employees and believes that the judicial management process was in their best interest as well as the interest of all other stakeholders.

Border Timbers incurred consistent losses in the manufacturing divisions, while revenue went down by 26% to $18 million in the year ended June 30 2014.

Company secretary Munesh Narotam said the company was now focusing on initiatives to enter new pole and sawn wood markets with improved pricing and outsourcing of log extraction and haulage functions among others.

Forestry planting was 1 067 hectares in the financial year 2014, representing a 40% increase on the prior year.

Total sales volume of poles was 11 196 cubic square metres, 39% down on prior year due to the sporadic nature of utility tender processes.

“Demand for poles, however, is high regionally and is expected to remain firm for the foreseeable future,” Narotam said.newsday

 

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