Happy Valley Nutrition’s creditors have given the administrators permission to execute a deed of company arrangement in order to try to save the embattled milk processor.
In August, the company’s creditors had given administrators an extra month to see if there is any substance in potential deals that could come to Happy Valley’s rescue.
The Australian stock exchange-listed company planned to build a dairy factory in the Waikato town of Ōtorohanga but ran out of capital.
Those owed money by Happy Valley gathered in August to vote on whether to tip it into liquidation.
McGrathNicol’s Andrew Grenfell and Kare Johnstone, who were appointed administrators in July, had recommended liquidating the company because no Deed of Company Arrangement (DoCA) had been proposed.
However, in the days before their administrators’ report was released, the pair received two expressions of interest to potentially recapitalise the business, which could have resulted in a DoCA.
At August’s meeting, creditors voted to adjourn the meeting for 30 working days to give the administrators time to work through the potential deals.
Grenfell told BusinessDesk at the time that he couldn’t disclose who the expressions of interest were from.
However, the extension was the maximum under the legislation and, during that time, they’d be working with the parties to try to progress their expression of interest and come up with something “more certain”, he said.
At the creditors’ watershed meeting on Thursday in Auckland, it was resolved that the companies execute a deed of company arrangement.
The market update to the ASX indicated more time was needed.
This would allow the companies to explore the possibility of recapitalising the companies and/or entering into a sale of all or part of the business and/or assets of the companies – in one or more transactions.
The sunset date – the ultimate deadline for the obligations to be met – under the holding DoCA is November 30. This date could be extended but in any event, no later than June 30 next year, the market announcement said.