James Thackray and Shaun Fraser of McGrathNichol in Perth have been appointed voluntary administrators of Kailis Organic Olive Groves, Kailis Olive Processing, Everyday Organic and Organic Olive Management.
Thackray told SmartCompany this morning that Kailis Organic Olive Groves, a non-listed public company and the largest of the four, tried to raise money earlier this year for further working capital, but failed.
Stressing that the administration is still in its early days – McGrathNichol was appointed last week – Thackray said Kailis Organic Olive Groves hadn't traded profitably over an unspecified period.
The olive grove manager, processor and distributor had revenue in the last year of about $5 to $7 million, and has about 20 staff members.
Unsecured creditors are owed about $2 million, including employees, shareholder loans and suppliers.
Thackray expressed confidence the assets would be sold.
"There is a market for it," he said, noting the company had sought a dominant position in the fledgling certified olive oil organic market.
According to its website, Kailis Organic Olive Groves was founded and managed by Mark Kailis, son of Red Rooster founder Peter Kailis, and began producing olive oil in 2000.
The West Australian has reported that Kailis Organic Olive Groves posted a $3.4 million loss for the 2009-10 year. The company noted at the time the collapse of managed investment scheme Great Southern had had "substantial impact" on its business., The company had managed the Great Southern olive assets for five years.
Kailis Organic Olive Groves sought a $30 million initial public offering – to be priced at $1 per share – midway through last year to help fund the $19.7 million acquisition of Great Southern olive asses around Perth from liquidators. The remainder of the cash was earmarked for working capital and expansion.
Mark Kailis said at the time that Kailis Organic sold to more than 250 retail outlets in Australia, and exported to seven countries, including Germany.
According to PerthNow, Kailis said the group had been "growing organically for more than nine years and the Great Southern Olive Assets represents a once-in-a-lifetime opportunity," stressing the company's ongoing success depended on integration.
But the float did not proceed and the company instead raised $25.5 million from private and family investors, according to the West Australian, and the acquisition went ahead late last year.
Kailis was quoted in October 2010 saying there was no doubt the company was "positioned to be a major organic trader on the world market."
The Kailis family first came to Australia in 1917 from Greece, with George Kailis setting up business interests in Western Australia.
George's son Peter Kailis founded Red Rooster in 1974. The family's other interests include seafood and pearls.
A creditors' meeting will be held on November 28 to determine whether to appoint a committee of creditors, and if so, the committee's members, and whether to appoint different administrators or retain McGrathNichol.
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