A Māori business and public affairs leader says the $1 million liquidation of an innovative whitebait company should not deter similar ventures aimed at commercialising fishing and other resources.
A liquidator was appointed for New Zealand Premium Whitebait Ltd on 3 August, according to Companies Office records. The company was set up in March 2014. Receivers Ecovis KGA Ltd of Auckland were appointed in April this year and set about sorting out the company’s affairs.
Two directors were appointed on 20 March this year as part of that process, replacing the previous directors of the company. One of those was Arapeta Tahana, Rotorua, who told The Mud he had been appointed to wind up the company’s affairs.
Arapeta Tahana is a Māori Constituency Councillor with the Bay of Plenty Regional Council and is listed as the Chairperson of Rotoiti 15 Trust. Merehira Savage, a Trustee at Te Pumautanga o Te Arawa and also from Rotorua, was appointed at the same time.
The final report on the company showed it owed nearly a million dollars to Tahu Whaoa Group Ltd of Rotorua and had $474 of cash and equivalents along with $146,030 of broodstock (whitebait) and consumables and a plant and equipment worth just over $2.3 million. Tahu Whaoa Group, owned by Ngati Tahu Ngati Whaoa Runanga Trust of Waiotapu, had appointed the receiver and subsequently took over the operations as a result of the liquidation.
The company was involved in the research and development of a whitebait farming venture that had seen limited commercial harvesting, receiver’s final report stated.
Arapeta Tahana told The Mud that New Zealand Premium Whitebait provided an opportunity for a new and innovative industry in New Zealand that pursued a more sustainable approach to whitebait supply, a species known to be threatened.
“It’s important that New Zealand and Māori continue to explore more sustainable commercial opportunities to ensure we maintain and enhance the beautiful biodiversity within our country.”
Asked if there was a concern whether this failure could impact other similar resource-based project, he said: “No, so long as we are willing to be courageous and innovative. We shouldn’t be afraid of trying new things, particularly when they support more sustainable industry.”
Even though the venture was a costly failure, he said it underlined the importance of being innovative, willing to take risk and to explore sustainable commercial opportunities.
“There have also been some commercial learnings in terms of understanding the challenges of commercialising concepts.
Whilst our Trust is disappointed our investment failed, we have learnt from the experience and are fortunate that our trust is still in a strong financial position, demonstrated by the fact that our equity has increased 10 per cent in the last financial year, despite the failure of this investment. Māori are in a strong position to drive sustainable development and will continue to explore these opportunities and build our capability to drive sustainable development.”
Apart shareholders’ funding, Tahu Whaoa Group had lent NZ Premium Whitebait funds. but a lack of cash inflow weighed against significant outflows and the working capital needed. As a result, the company was unable to service the loan or meet its business debts as they came due.
The whitebait development business was focussed around a venture breeding stock at a property in Silverdale, near Warkworth, Auckland.
While purchasers were sought for the business, efforts were made to keep the brood stock alive and to maintain the business as a going concern. However, no realistic purchaser could be found, so the business had to wound up.
In doing so, the receiver noted: “A key factor was the fact that the business being carried on by the Company represented little more than a pilot project and, while there was no doubt around the fact that it represents a scientifically sound operation, a significant capital spend will be required in order to commercialise the business.
“That, together with the expected quantum for the existing business assets acted as a deterrent to all potential purchasers.
“Faced with no realistic purchaser the Appointer [Tahu Whaoa Group] agreed to purchase the business in consideration for its secured debt and a cash payment. A sale and purchase agreement was executed on 15 May 2018, some six weeks after the appointment of the Receivers.”
The shareholders involved in NZ Whitebait Premium included a range of people with varying interests from Rotorua, Whakatane, Petone, Turangi and elsewhere, along with companies Ka Ora Ltd, Rotoiti 15 and Ruahine &Kuharua Ltd Partnership, RDB Investments Ltd, FTR Sol Ltd and EFF N CEE Ltd.
The company’s web site - whitebait.co.nz - used the brand name Manāki Premium New Zealand Whitebait and claims: “We are the world’s first sustainable producer of fresh New Zealand whitebait.”
It says the company’s product is New Zealand’s first and only 100 per cent sustainably produced whitebait. It adds that the company not only produces whitebait during the usual season but has it available all year round.
In its history section, the web site says that a team at Mahurangi Technical Institute in Warkworth were successfully able to hatch some of the whitebait species for reintroduction into local streams affected by the development of the Northern Motorway extension.
“Over the next eight years the team successfully developed their ability to breed all of the whitebait species. In 2014, with the environmental aspirations successfully achieved, New Zealand Premium Whitebait was formed to undertake the commercial development of whitebait farming.
“Now after 2 years of further development New Zealand Premium Whitebait is able to produce 100% sustainable, 100% natural Manāki whitebait year-round,” the web site said.
Lessons from innovative whitebait company failure
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