New Progress Milling rescue plan rejected

The consortium of three companies that filed the alternative Business Rescue Plan (BRP) for Progress Milling, will approach the court on an urgent basis to set aside the vote of a major creditor to obstruct the acceptance of the BRP.
This follows after the alternative BRP was considered by creditors at a meeting in the city on Monday and when the acceptance of the plan was brought to a vote, 59% of the votes were in favour but missed the 75% required by law.
“The first BRP was not tabled because the required Post Commencement Finance (PCF) was not made available,” Mark Poole, Business Rescue Practitioner, informed the creditors.

The alternative BRP was received from a consortium consisting of Louis Dreyfus Commodities Africa (Pty) Ltd, a multi-national company operating in more than 100 countries and that established itself in South Africa in 1924 and is a leading maize, wheat, oil seeds and rice trader; Il Molino CC, a specialty wheat mill that has been successfully operating in Gauteng for eight years and DH Brothers (Pty) Ltd, trading as Willowton. Willowton first began operations in South Africa 44 years ago and is the country’s largest sunflower seed crusher with well-known brands such as Sunfoil, Sunshine D and Nuvolite in their stable. The BRP proposed that Progress Milling continues with its operations, all secured creditors are paid in full and that the remaining creditors receive between 18,7 and 35 cents in the Rand. The 6 000 storage maize farmers (small scale farmers) will receive 100% of their claims as at 31 May 2016. The jobs of all employees will also be guaranteed for 12 months. The non-core assets of Progress Milling will be disposed of and some may be acquired after a due diligence exercise, the consortium confirmed. The Progress Group entities are A M Alberts (Pty) Ltd, Progress Milling Lydenburg (Pty) Ltd, Progress Prepacking (Pty) Ltd, Progress Transport (Pty) Ltd, Safmadabe Commercial Properties (Pty) Ltd, Safmadabe Industrial Properties (Pty) Ltd, Safmadabe (Pty) Ltd and Future Milling (Pty) Ltd.
Small scale farmer Phineas Thobejane said that he was in favour of any plan that will ensure that the suppliers of maize are remunerated. “We just have to get our returns because it is our only means of income and we are now starving,” Thobejane said.
After the meeting, Mohamed Essack, Director of Il Molino CC, said to Polokwane Observer that 38 to 41% of the dissenting votes came from Inter Africa Grain/Seaboard International, maize suppliers to Progress Milling. “The consortium is now going to court so that we can save the storage farmers return maize and the jobs of 700 people and ask the court to adopt our plan. As an amendment the consortium will propose to the court that we ‘cram down’ the dissenting creditor to a lower dividend so that we can offer even more to other small concurrent creditors,” Essack said.

Story: BARRY VILJOEN
>>barryv.observer@gmail.com

Featured photo: Business Rescue Practitioner Eric Sono at the meeting of creditors on Monday.