What really happened at S&W Seed Company

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By Dwain Duxson - An Ag Enthusiast

What really happened at S&W Seed Company - S&W Seed Company went broke, owing $10.5 million to Farmers and $39 million to the NAB. One Farmer reached out to tell us what really happened. We will piece it out here.

The company was turning over around $50 million, and for some reason, they loaned the parent company in the US (S&W USA) $30 million, which was unsecured. The directors, who were all on $500k each, did a runner after things started looking a little shaky. They bolted (sacked/resigned), and the company went into administration.

Deloitte (the administrators) came along and ripped a further $2.5 million out of the coffers for 12 weeks of work. They then sold the company to Avior Capital for $11 million, which is owned by ex-Deloitte Partners. However, the day before the vote on what was to happen to the company, the committee (committee of inspection - The Farmer reps) got a phone call from a legitimate NZ Seed company asking why their offer wasn’t considered. When they pressed Deloitte on this, they claimed it wasn’t a good enough offer to present, but they argued that the deal wasn’t only about money. The committee thought that the business needed someone to partner with and rebuild a relationship with for the future, and an established Seed company fitted better with thier vision rather than a finance company (Avior) looking to flip the company.

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The committee said, looking back, we, as Farmers and service providers, were railroaded and overruled by Deloitte/S&W to get what they needed out of this situation, and we are left to rebuild the industry and go again.

The biggest coincidence of all, a Sunflower Seed grower delivered $3 million worth of Seed to the Seed shed 2 days before they announced they were going into voluntary administration. That Seed is all now in the S&W inventory (stock) pool, which was picked up by Avior Capital for 15c/$. The directors, through this, have walked away scot-free.

Avior Capital got a cheap $50 million turnover company with $20 million worth of stock for $11 million and have left the Farmer $10.5 million out of pocket. This one smells big time. Reply to dwaind@farmtender.com.au

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