Moon Lake heads off dairy fears

MOON Lake Investments, the company which owns the former Van Diemen’s Land Company dairy farms, has moved to reassure staff and stakeholders in the state’s North-West.

Managing director Sean Shwe has held a series of meetings in Smithton with some of the company’s 126 employees.

A spokesman said the meetings were to explain “where things are at”.

The meetings follow the mass resignation on Tuesday of non-executive directors and the impending resignation of chief executive officer Evan Rolley after a dispute over farm management and a new company structure.

Moon Lake Investments paid $280 million for the 24 dairy farms in early 2016 with the aim of establishing a vertically integrated dairy business and to expand its market internationally.

However, the company re- corded a $60 million loss, including a $50 million impairment loss, in the 13 months to December 2016.

The Mercury understands that directors and management were unanimously in favour of a farm management strategy to invest about $4 million a year in water storage and irrigation. This was rejected by owner Xianfeng Lu.

Moon Lake has proposed a restructure which would result in it coming under the umbrella of Mr Lu’s Shenzen stock exchange listed company Ningbo Xiangfeng New Material Company Co. Ltd (APlus).

The company has said new CEO would be found.

Denison MP Andrew Wilkie, who lobbied against the sale to Moon Lake, said opponents to the sale had been right.

“Regrettably, but unsurprisingly, all the miraculous promises are unravelling about the selling of VDL to the Chinese,” he said. “For example, the big investment in new infrastruc- a ture, and presumably environmental improvements, are not being realised and lots of new jobs are not being created.”

The Foreign Investment Review Board was told that Mr Lu would invest $100 million and employ 95 more people if his bid was approved.

In Moon Lake’s first year total assets of $249 million were offset by total liabilities of $76 million, leaving net assets of $172.4 million on December 31, 2016.

A $70 million bank loan was originally due for repayment on March 31, 2018, but the company says it has received a letter of offer until June 30, 2029.

“As at 31 December the company was in breach of reporting requirements of the facility and therefore in accordance with accounting standards the loan is classified as current. The financier has provided a waiver to noncompliance to covenants subsequent to balance date,” Moon Lake’s financial report said.