Mill closure costs 16 jobs

CLOSING: Waitane Mill in Onekawa is set to close. PHOTO WARREN BUCKLAND

Workers at Waitane Mill Ltd in Onekawa who were told out of the blue at the end of August that they no longer had jobs because the timber mill was closing down should hear from the company's liquidators this week to clarify their position.

A worker who did not want to be named said he was one of about 16 employees who were shocked to hear the mill was being closed, following in the footsteps of the company's Rotorua-based majority shareholder Verda International Ltd going into receivership on August 26.

"We were called into the office on the Friday (August 26) and given notice to say our employment as of that day had been terminated due to the financial position of the company.

"We were told we would be paid out the last week of work and any outstanding holiday pay would be paid, but we weren't and nobody knows what's going on," the worker said.

"I'm owed at least five weeks holiday pay including pay from last year, it came as a shock to us, although in the last couple of weeks we had not had any logs coming in so we knew something was up."

First incorporated in 1998, the company was placed into liquidation on September 12.
Liquidator Thomas Rodewald said that the company's directors had advised that over the last two years, there were only three months when there were enough logs being supplied to operate the mill on a viable basis.

"In July 2016 it became apparent that the shareholders would be required to contribute further funding to enable the mill to continue to trade.

"Negotiations were held over a potential restructure. It became apparent that in early August a restructure would not be possible and the decision was made to close the mill down in the short term."

It was noted in the liquidators' report on September 19 that the company had traded at losses of $4.29 million since its inception, a large part of that loss attributed to a USA claim pre-dating the involvement of the current shareholders.

Financial statements to July 31 showed further losses of $200,000.

Efforts were being made to sell the mill business and assets including buildings, plant and machinery, office furniture and equipment, and a motor vehicle.

"We've had some people looking, but sawmills are historically difficult to sell - a lot have closed down and not been sold. We will know more by early next week," Mr Rodewald said.

He said letters were being sent this week to the employees they had contact details for, listing their claims and advising on the position of their claims.

In the liquidators' statement of what the company owed, employee claims for holiday pay were estimated at $33,483, and severance pay at $30,000.