Australian timber wastes recycling business Altus, which had begun exporting wood pellets across the globe has tumbled into administration, with Japanese powerhouse Mitsui then appointing receivers. Source: The Financial Review
Altus Renewables had turned pine sawdust into pellets, labelling the product as a complementary source of high-energy fuel for power stations.
But regulatory filings show Altus, based in Loganholme in southeast Queensland, appointed administrators from McGrath Nicol. Mitsui then dispatched FTI Consulting as receivers.
Mitsui, which had an offtake agreement with Altus, had lent $14.5 million to the company as of June last year, according to the failed company’s latest accounts. Export Finance Australia, the federal agency, had also lent $2.1 million and National Australia Bank had a lease facility tapped for $118,000.
Altus had further issued convertible notes worth $5 million in September last year and had total liabilities of $27.6 million.
FTI said the receivers, Ben Campbell and John Park, were now in “control of the business, operations and assets” of Altus and a subsidiary. This included its Tuan biomass wood-pellet manufacturing plant near Maryborough in Queensland and a “Green Triangle Project” near Mount Gambier in South Australia.
“The receivers intend to continue trading the Tuan plant on a business-as-usual basis whilst they undertake an urgent assessment of the companies’ financial position, and explore options for a sale of business and assets, and/or recapitalisation of the companies,” FTI said.
Matthew Caddy, Robert Smith and Jamie Harris were appointed from McGrath Nicol and will prepare a report for creditors. Among their potential lines of inquiry for the business’s reason for facing insolvency will be any squeeze in input costs.
Altus made industrial-grade wood pellets from pine sawdust, which the company acquired from other operators. Its accounts indicate a raw costs squeeze, showing the company lost $3.48 million in 2022 compared with a profit of $582,000 a year earlier. While its revenues rose 24% to $14.14 million in the year, raw materials costs lifted 43.8% to $5.2 million.
The accounts blamed the loss on delays in upgrade works at its plant, investment spending to progress the Green Triangle Project and foreign exchange rate exposures.
“The upgrade was implemented in stages which was intended to allow the plant to operate at increasingly higher production levels using the newly installed equipment. However, global shipping delays from the US delayed the installation of the fourth pellet press, initially scheduled for the December 2021 annual shutdown, to late March 2022.”
The accounts noted a net asset deficiency of $1.4 million and auditors from Bentleys had flagged in their note a material uncertainty about the operation continuing to run. This was dependent on “continuing support of lenders and increased production to establish sustainable profitable operations”.
