Harvey Norman dairy JV enters receivership
Harvey Norman has found it harder to milk profits from cows than from electronics and homewares, with its Victorian dairy joint venture falling into receivership.
Creditor National Australia Bank appointed McGrath Nicol as receiver and manager of Coomboona Holdings after the farm's directors - who include Harvey Norman chairman Gerry Harvey - hired Ferrier Hodgson as administrators.
Harvey Norman, which paid $34 million for its 49.9 per cent stake in Coomboona in 2015, announced the moves on Monday without giving further details.
Analysts had long considered the dairy acquisition odd because it was unrelated to Harvey Norman's core business, and the retailer booked a $20.7 million impairment against the joint venture in last month's half-year results.
Coomboona owns land and farm assets in northern Victoria's Goulburn Valley, including dairy farm operations, and a pedigree breeding and genetics division.
The business incurred mounting trading losses and Harvey Norman said last month that it was in dispute with joint venture partner Eternal Sound on matters including Coomboona's future direction.
Harvey Norman had also demanded that Coomboona repay $18.5 million in debt to Harvey Norman.
Harvey Norman gave no explanation for its interest in Coomboona when it notified the Australian Securities Exchange of the acquisition in 2015.
But billionaire Gerry Harvey, who has extensive horse-racing and breeding interests, told The Australian at the time that the investment reflected the tough times in the retailing sector.
"You have got to look around to try to find out where you can put your money and try and make some money. It's not that bloody easy," Mr Harvey had said.
He said that if Harvey Norman was not making money out of retailing, it would put its money into something else.
Harvey Norman shares closed one cent lower at $3.63.
Back to Breaking News