Happy Valley Nutrition has gone into voluntary administration, appointing Andrew Grenfell and Kare Johnstone of restructuring and advisory firm McGrathNicol.
The announcement, made on the Australian Stock Exchange, takes effect on July 5.
The statement said that the administrators are undertaking an urgent review of HVN.
HVN chair Kevin Bush said the announcement is disappointing.
“HVN was able to continue during the extremely challenging covid period where New Zealand was in lockdown for nearly three years which materially impacted our ability to progress the project.
“Post-covid saw a material change in the dairy industry, particularly in HVN’s original ambition within the infant formula market, which is now seeing the negative impacts on other industry players.
“Our ability to identify and pursue a dairy protein strategy in the last eight months saw a significant amount of interest and we were able to secure offtake agreements as previously announced.”
“As a result of this HVN had several investors undertake due diligence and negotiations since April until Friday last week. However, unfortunately the current market conditions of increasing high interest rates, tightening milk supply and the continued emergence of China domestic milk supply have left HVN unable to secure the necessary funding to continue at this point.”
A first statutory meeting of creditors is expected to take place on July 18. Under the New Zealand Companies Act, such a meeting is required to take place within eight business days after the administration begins.
A meeting notice setting out the time and location for the first meeting of the creditors will be distributed to HVN’s creditors over the coming days.
HVN director Grant Horan also announced his resignation. The news comes just a week after the company’s chief financial officer, Richard Chew, resigned to pursue another leadership opportunity.
On June 30, Merricks Capital agreed to give HVN an extension to the maturity date by which the fledgling dairy company has to repay its secured debt, from June 30 to August 16.
A day earlier, HVN announced a pause in trading on the ASX and a suspension from quotation.
The company aimed to build a milk processing factory in Otorohanga in Waikato.
Since April 2016, HVN has completed a site acquisition, secured a water supply licence, locked in land use consents to build the factory and has gained the necessary resource consents for air, storm water and wastewater discharges, and water supply to operate the facility.
Waikato Federated Farmers dairy chair Matthew Zonderop said the news was a shame, but not a surprise.
“I don’t think it’s a surprise, the way the industry is going at the moment. We had a good year last season as far as payout was concerned, but that was a one in 10 years.
“The way interest rates have gone, and the recession is looming, and there’s labour shortages – a whole lot of factors would have gone into it, including cost increases on stainless [steel].
“Those costs would have just spiralled out of control.”