The three directors of an Invercargill City Council-owned forestry company which is being sold have effectively been forced to resign during the Covid-19 pandemic and two of them are unimpressed. Source: Stuff NZ
Invercargill City Forests Limited chairman Mel Montgomery said she and fellow directors Ben Nettleton and Rebecca Keoghan were asked to resign by Holdco chairman Brian Wood in April, which they did.
Holdco, an investment company owned by the city council, owns Invercargill City Forests which is in the process of having its forests sold and being liquidated.
Its 14 forests in Southland, Otago and Nelson/Marlborough have a total productive area of more than 3000ha of mostly radiata pine.
The forestry company directors were overseeing the sales process at the time of their departure, Montgomery said.
”He [Wood] basically said that due to Covid-19 money was tight amongst the group and we had done all the work for the sale and they could take it from there. The next stage of the sales process was to decide which parties to invite to make offers, she said.
”But we never got a chance to do that.”
The directors had a lot of institutional knowledge and had done all the background work, she said.
”I feel like it wasn’t the right call for the sake of a couple of months directors fees, I think we should have seen the process through.”
Another director, Ben Nettleton, said the move to ask the directors to resign was surprising given they were at a sensitive stage of the sales process.
He got a sense the Holdco board was wanting to move it forward with ”indecent haste”.
The third forestry company director, Rebecca Keoghan did not respond by Tuesday’s 3pm deadline, but Holdco chairman Brian Wood said Keoghan had no problem with the request to resign.
Wood confirmed he had asked the directors to resign as a cost-cutting measure.
”We looked at the overall position of the group and where we could save cash and the forestry company was one area we could.”
The forestry company directors were costing about $10,000 a month in fees and costs and they had done 90% of their work by preparing the company’s forests for sale, Wood said.
The only tasks left were to decide who to sell the forests to and liquidate the company, he said.
The sales process was delayed due to the Covid-19 lockdown and the directors didn’t have a lot to do during that period, he added.
Wood said the Holdco directors would now complete the sales process.
He believed it would take three months to sell the forests and liquidate the company.
The proceeds from the sale of the forests would be used to repay the debt Invercargill City Forests limited had with Holdco.
”It owes Holdco about NZ$24m, it’s not in a good financial position.
”It’s been an under-performing investment.”
Holdco’s other subsidiary companies include Electricity Invercargill Limited and a 97.2% stake in Invercargill Airport Limited.
