Hawke’s Bay Apple Grower South Pacific Growers Enters Receivership Over $13m Debt

Government Cyclone Recovery Loan Left Unpaid After Receivership

The Ministry of Business, Innovation and Employment (MBIE) stated that the $13 million financial package was issued in December 2023 through the North Island Weather Event Fund. According to the MBIE spokesman, the funding was established specifically to support recovery efforts following Cyclone Gabrielle, helping businesses stabilize and re-engage with commercial lenders. Loan terms regarding repayments remain commercially sensitive, according to the agency.

However, BDO Auckland confirmed in its report that no portion of the $13 million Government advance has been repaid. The massive debt is categorized under unsecured creditors in the receivers’ documentation. The report explicitly noted that it appears unlikely any funds will be available for distribution to unsecured creditors following the liquidation process.

Orchard Leases and Mounting Financial Pressures

South Pacific Growers Ltd operated from 2020 until it recently ceased trading. The business did not own land, instead leasing 32 orchards spanning a total of 191 hectares across the region, according to the receivers’ findings. Operations took a severe hit when the company suffered extensive damage to orchards and equipment during Cyclone Gabrielle in February 2023.

The company director attempted to raise capital and secure additional recovery funding to restore the damaged orchards and sustain operations through the recovery phase. Despite these efforts, incoming crop proceeds and external funding fell short. Cashflow problems escalated rapidly, leaving the business unable to settle its debts as they fell due.

Secured Creditors Face Shortfalls Ahead of Asset Auction

An overseas creditor and part shareholder, Pacific Wick Ltd, is owed almost $6m and ultimately triggered the receivership, according to the BDO Auckland report. Additional creditors include prominent Hawke’s Bay agricultural businesses such as Bostock NZ, which is owed approximately $580,000, and Rockit, which is owed over $2 million. Meanwhile, employees are owed roughly $5,000 in accrued annual leave.

The receivers’ report omitted the exact valuation of the company’s physical assets. The report indicated that after the realization of all company assets, shortfalls will likely remain for both secured and preferential creditors. To recover funds, an auction to sell off remaining equipment has been scheduled for Thursday, September 17. Managed by Ritchie Bros through Ironplanet.com, the auction lineup includes tractors, trailers, sprayers, and forklifts.

Broader Fallout Across the Hawke’s Bay Apple Industry

The collapse of South Pacific Growers Ltd compounds financial distress across the regional agricultural sector. Companies reliant on the apple industry have experienced severe downstream effects from ongoing market pressures. Another major Hawke’s Bay apple grower and exporter, Kiwi Crunch, has also fallen into turmoil, leaving behind a significant trail of industry debt.

Frequently Asked Questions

What was the purpose of the North Island Weather Event Fund loan?

The fund was established by the Government to support business recovery following Cyclone Gabrielle, helping operators stabilize and re-engage with commercial lenders.

Who appointed the receivers for South Pacific Growers Ltd?

The receivership was appointed by an overseas creditor and part shareholder, Pacific Wick Ltd, which is owed almost $6m.

When is the asset auction scheduled?

The auction for company assets, including tractors, sprayers, and forklifts, is scheduled for Thursday, September 17, and will be run by Ritchie Bros.

---