Friday, 19 April 2024 09:55

Machinery builder in liquidation

Written by  Mark Daniel
Reese Engineering is the company behind the Aitchison brand known for seeders, rollers and spreaders. Reese Engineering is the company behind the Aitchison brand known for seeders, rollers and spreaders.

In what appears to be a casualty of the downturn in the agricultural sector, a well-known machinery brand is now in the hands of liquidators and owing creditors $6.6 million.

Liquidators Ecovis KGA are now considering selling Reese Engineering, the company behind the Aitchison brand known for seeders, rollers, spreaders and bale feeders and well-known UFO mowers, manufactured at facilities in the Manawatu region, for supply to the home and export markets.

The brand was established more than 50 years ago by former NZ rower Peter Aitchison, but more recently has been owned by Ross and Anne Simpson’s Simpro Holdings.

The liquidators first report suggests that the business’ collapse had been caused by the downturn in the sector, both in NZ and Australia, with a “stagnating” sales and order pipeline leading to oversupply of inventory in the market. They also note that losses had occurred after a “significant” customer order was cancelled at the end of 2023.

After the liquidators were appointed, Reese Engineering ceased trading and terminated staff, leading to the primary objective of trying to achieve a sale for the business, which if not possible, would unfortunately lead to a disposal auction of the company’s assets.

Total liabilities were estimated at around $6.6m, of which $3.1m was owed to CMI Ltd – an entity also owned by Simpro Holdings. Meanwhile, Westpac was owed $2.3m, trade creditors are owed $587,000 and $174,000 was owed in employee wages and holiday pay. The company is said to be owed $428,000 from customers, with related parties also owing a further $1.1m.

Total assets are said to be to $4.1m, although at this stage the liquidators have withheld the value of the fixed assets and intellectual property. While the machine inventory carried a book value of $2.5m, the report noted it included slowmoving and obsolete stock, with the realisable value likely to be substantially lower than book value.

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