A TAMWORTH-based grain-handling company has gone into administration after collapsing under the weight of debts totalling more than $10 million.
LGL Commodities, whose main office is located in Bourke St, was established in 2009 following the deregulation of the Australian grains industry.
Its interests include packing facilities at Harefield, north of Wagga, and Pittsworth, west of Toowoomba, as well as contract haulage operations.
Directors volunteered to go into administration about two weeks ago amid concerns the company’s debts had become unmanageable.
Administrator Andrew Yeo, of Pitcher Partners in Melbourne, told The Leader the company owed a secured creditor $4 million and unsecured creditors about $6.5 million. However, he said the money owed to unsecured creditors, such as grain growers, cartage contractors and logistics operators, could grow as the business is unwound.
Mr Yeo said an initial creditors meeting was held in Melbourne on Thursday, while a second is scheduled for July 21.
“Hopefully by then we’ll have a much better idea of what caused the financial demise and also any estimated return to creditors,” he said.
“It’s fair to say at the moment that the unsecured creditors are down the list and from what we can see so far, from the immediate assets of the company, it doesn’t look like there will be enough assets to pay the secured creditors in full.”
It is understood LGL Commodities was itself an unsecured creditor of fellow failed grain traders Sapphire (SA) Pty Ltd and Convector Grain.
According to the LGL Commodities website its chairman Mark Long has worked in the industry for 20 years, including with Merrill Lynch in Singapore. Both managing director Michael Long and general manager Tim Griffiths worked for AWB Limited prior to taking up their roles with LGL Commodities.
The business and all its assets were up for sale, with expressions of interest closing on July 9.