The new owners of Victorian biscuit maker Unibic are bullish about the company’s prospects, after a debt and management restructure rescued the Anzac biscuit maker from administration.
Employees are meeting today to discuss the buyout by a consortium of senior managers and local investors called Modern Baking Company. The acquisition is believed to have cost millions of dollars.
A spokesman for administrator Lawler Draper Dillon said this morning the new investors are led by Unibic former chief operating officer Matt Forster – who is now joint managing director of Modern Baking Company – plus three other former Unibic workers. The rest are a consortium of private investors.
Unibic ran into problems when the company invested in a $44 million-odd production plant in the Melbourne suburb of Broadmeadows, and subsequently struggled under its $30 million-odd debt load. Cashflow problems were compounded by commodity price rises pressuring already tight margins.
The buyout plan was preferred to a sale of the plant because a sale price would not cover secured creditors such as banks, the Lawler Draper Dillon spokesman said.
Unsecured creditors – typically suppliers – have missed out, although they might receive small payments under a deed of company arrangement, the spokesman said. The plus side is that they will keep their supply controls.
All employee entitlements will be covered and there will be a partial return to secured creditors.
As part of the deal, former managing director Michael Quinn and his brother, Paul Quinn, no longer control the business, with their full ownership now reduced to about 20%.
The spokesman for the administrator said the new owners are “pretty bullish,” and focused on efficiencies and their good staff and products.
“They’ve had the handcuffs taken off them,” he said, referring to the debt load.
In a statement, the consortium said the “rescue of the business is testimony to what can be achieved with the cooperation and support of all the company’s stakeholders.”
Unibic Australia, which has about 170 workers, was once owned by Lazard before becoming family-run.
The new owners said the RSL, which receives donations from the sale of Anzac biscuits, was “vital to the rescue, as well as the support and encouragement given by the company’s customers, particularly the supermarket chains and suppliers.”
Glenn Franklin, Petr Vrsecky and Stirling Horne of Lawler Draper Dillon were appointed administrators last month, following a wind-up notice from creditors. Production at the Broadmeadows plant stopped, but is tipped to shortly restart.
Last year, Quinn was quoted saying the company was looking for a strategic investor to help boost exports to Asia. “We’re caught in a bit of a squeeze with the raw material supply situation together with a very competitive retail environment. It makes it very difficult to operate without a reinvention of the business,” Quinn told Bloomberg.
The company, and Matt Forster, were contacted for comment this morning but were not available before publication.